Nigeria’s Capital Import Drops by 34% in One Year

Nigeria investment
  • Nigeria’s Capital Import Drops by 34% in One Year

The National Bureau of Statistics on Monday released the capital importation report for the third quarter of this year, with the country recording an increase of 74.84 per cent or $1.82bn in investment inflow from $1.04bn in the second quarter.

The bureau in the report which was made available to our correspondent in Abuja, however, stated that when compared with the inflow in the relative third quarter of 2015, the capital imported into the country represented a decline of 33.7 per cent.

There are three major categories of investments that make up the total investment inflow into the country. They are portfolio investments, foreign direct investments and other investments.

An analysis of the report revealed that during the third quarter, portfolio investment rose by 172.84 per cent to $920.32m from $337.3m in the second quarter.

In the same vein, the report stated that foreign direct investment rose by 84.8 per cent from $184.3m in the second quarter to $340.64m in the third quarter, while other investments rose by 7.8 per cent to $561.6m from $520.6m.

It stated, “In the third quarter of 2016, portfolio investment was the largest component of imported capital and accounted for $920.32m. Although portfolio equity declined by 28.12 per cent relative to the previous quarter, this is outweighed by large increases in other types of portfolio investments.

“Bonds increased from zero in the second quarter, to $369m in the third, and money market instruments increased from $57.5m to $350.2m over the same period, an increase of 509.03 per cent.

“This is the first quarter since the 2007 second quarter in which equity was not the largest part of portfolio investment. At $201.12m, this type of portfolio investment remains considerably subdued relative to previous highs of $4.9bn in the first quarter of 2013 and $3.87bn in the second quarter of 2014.”

The report explained that the highest amount of investment inflow for the third quarter of this year was recorded in the month of August when $894m was brought into Nigeria by investors.

This, according to the report, is the highest monthly amount brought into the country by investors since July 2015.

The report explained further that in the month of September, the country recorded a total investment inflow of $649.76m.

This, it noted, was still more than any monthly investment inflow recorded during the first and second quarters of this year.

“The total value of capital imported into Nigeria in the third quarter of 2016 was estimated to be $1.82bn, which represents an increase of 74.84 per cent relative to the second quarter,” the report added.

Explaining the reason for the quarterly increase in investment inflow, the report stated that most of the increase in the value of capital importation came from debt financing.

For instance, it said that out of the total quarterly increase, 85 per cent was accounted for by increases in portfolio investment in bonds and money market instruments.

In terms of country of origin of the investment inflows, the report stated that the country from which Nigeria imported by far the most capital was the United Kingdom, which accounted for $1.09bn, or 60.24 per cent of the total.

It added that since 2010, the United Kingdom had accounted for the highest value of capital importation to Nigeria.

This is followed by the United States, which accounted for $426.98m, or 23.43 per cent of the total.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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