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

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  • 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.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Investment

Union Bank Launches Investment App M36 for Fixed-income Products, Others

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M36, a new digital platform designed to deliver a wide range of investment products directly to individuals, has launched in Nigeria.

Through an innovative, user-friendly app, M36 offers investment options not typically available on self-service digital platforms including foreign currency transactions, commercial papers, local and foreign denominated bonds, treasury bills and other fixed income products.

M36 also offers bespoke solutions for both new and experienced investors as well as a 24-hour lifestyle concierge service to meet the needs of discerning customers.

In a rapidly evolving environment with changing consumer behavior fueled by technology and growing access to information, M36 is looking to expand opportunities for investors at all levels, while also simplifying the process of investing.

M36 was developed by Union Bank as part of its strategic focus on delivering superior customer solutions leveraging technology and innovation.

The Bank partnered with several asset management companies to deliver the broad range of investment products on the M36 platform.

Chuka Emerole, Head, Treasury at Union Bank said about M36:

“M36 eliminates the traditional barriers to investing and offers investors direct access to financial instruments that would usually require the service of an investment or relationship manager.

“We’ve designed M36 to ensure simplicity in the onboarding and investing process while also empowering the customer to make sound investment choices based on their financial objectives.

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Investment

United States Firms Operating in Nigeria Plans to Invest $2.4 Billion in Nigeria – Report

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United States Firms Operating in Nigeria Plans to Invest $2.4 Billion in Nigeria – Report

A report compiled by the American Business Council, the United States Embassy, Verraki, KPMG and PwC showed American firms operating in Nigeria plans to invest $2.37 billion in the country in the next three years.

In the 2020 Nigeria Economic Impact Survey, the impact of US firms on the Nigerian economy was analysed while changes in business revenue, foreign investment, job creation, gross value added and plans for expansion were measured.

45 United States companies operating in Nigeria were surveyed and data obtained analysed, according to the report.

The report revealed that US companies in Nigeria created over 30,000 indirect jobs in 2019, a decline from three million in 2018 and over 13,100 direct jobs, down from 18,000 in 2018.

The firms realised N1.08 trillion in revenue in 2019, representing a decline from N1.47 trillion when compared to N1.47 trillion generated in 2018.

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Afreximbank, AAAM to Drive Automotive Investment

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Afreximbank

Afreximbank, AAAM to Drive Automotive Investment

The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa.

President of Afreximbank, Prof. Benedict Oramah and President of AAAM/Managing Director of Nissan Africa, Mike Whitfield, signed the MoU in early February, according to a statement yesterday.

The deal formalised the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity building initiatives.

Oramah, said, “the strategic partnership with AAAM will facilitate the implementation of the Bank’s Automotive programme which aims to catalyze the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA).”

Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEM), suppliers, and local partners.

The two organisations plan to undertake comprehensive studies to map potential regional automotive value chains on the continent in regional economic clusters, in order to enable the manufacture of automotive components for supply to hub assemblers.

“To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain. The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.

“The MoU also provides for them to support, in conjunction with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies, and strategies.

“With an integrated market under the AfCFTA, abundant and cheap labour, natural resource wealth, and a growing middle class, African countries are increasingly turning their attention to support the emergence of their automotive industries.

“Therefore, the collaboration between Afreximbank and AAAM will be an opportunity to empower the aspirations of African countries towards re-focusing their economies on industrialisation and export manufacturing and fostering the emergence of regional value chains,” the statement added.

“The signing of the MoU with Afreximbank is an exciting milestone for the development of the automotive industry in Africa. At the 2020 digital Africa Auto Forum, the lack of affordable financing available for the automotive sector was identified as one of the key inhibiters for the growth and development of the automotive industry in Africa and having Afreximbank on board is a game changer and a hugely positive development,” CEO of AAAM, David Coffey said.

“It is wonderful to have a partner that is as committed as the AAAM to driving the development and growth of our sector on the continent; this collaboration will ensure genuine progress for our industry in Africa,” Coffey added.

Other areas covered by the MoU include working with the African Union and the African Organisation for Standardisation to harmonise automotive standards across the continent and developing an automotive focused training program for both the public and private sector.

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