LAGOS, May 11 (Reuters) - Nigeria is counting on foreign investment to help diversify its oil-dependent economy. Fears its naira currency is overvalued have deterred many investors, but some, including China, see its fast-rising population as a powerful long-term draw.

Official data showed Foreign Direct Investment (FDI) up by 42 percent to $174.46 million in the first quarter compared to the same period last year; some was reinvestment by firms struggling to repatriate profits given the naira is fixed at 198 to the dollar while it trades unofficially at 320, analysts say.

South Africa fashion retailer Truworths is among firms planning to leave Africa’s largest economy due to hard currency shortages.

Companies are hoping for a fillip from the record $30 billion 2016 budget signed by President Muhammadu Buhari last week. The government aims to inject $1.7 billion into the economy this quarter to pay contractors and revive construction projects and Buhari is seeking investment in mining, cocoa, agriculture and the leather industry.

The International Monetary Fund has recommended a more flexible exchange rate but the 73-year-old Buhari has said that when he ran Nigeria as military ruler in the 80s he did not bow to pressure from the Washington-based fund and will not now.

Aside from the exchange rate, the IMF welcomed government pledges to improve security and transparency and create jobs, but said, given low oil prices, Abuja needed to raise VAT, broaden the tax base and improve financial management.

James Nelson, Head of Debt Capital Markets, Africa, at Standard Chartered said Buhari faced big challenges but had begun to make changes. “He is making a huge improvement in Nigeria,” he said.

Major investments since Buhari took office in May 2015:

-- Coca-Cola bought a 40 percent stake in leading Nigerian juice and drinks maker Chi in January, paying a “mid-digit” million dollar sum, according to industry sources.

-- Dangote Group, the company owned by Africa’s richest man Aliko Dangote, signed a $2 billion loan deal in April with the Industrial Commercial Bank of China Ltd to build two cement plants.

-- In total, Nigeria got offers from China for loans worth $6 billion to fund various infrastructure projects, Nigerian officials have said. According to the presidency, the following deals were signed during a visit by Buhari to China in April:

-- Nigerian energy firm North South Power and Chinese state energy firm Sinohydro Corp signed a $478 million deal to build a 300 mega watt power plant in Niger state.

-- Local miner Granite and Marble Nigeria and Shanghai Shibang signed a deal worth $55 mln to build a granite mining plant.

-- Nigeria’s Infrastructure Bank signed a deal with Sinohydro Corp to build a $1 billion railway between the capital Abuja and Lagos, the commercial centre. The firms also agreed to build a 27-storey residential complex for $250 and spend $2.5 billion on a subway in Lagos, which is famous for traffic jams.

-- Nigerian energy firm Mojec International Limited and China’s Microstar signed a $25 mln agreement to develop power metering systems. (reporting by Ulf Laessing; additional reporting by Karin Strohecker, editing by Philippa Fletcher)