- Nigeria’s Capital Inflow Rises by 54% in Q1 2020
Despite economic headwinds and global uncertainties due to the COVID-19 pandemic, capital inflow rose by 53.97 percent in the first quarter.
The National Bureau of Statistics (NBS) reported that the total value of capital importation into Nigeria grew by 53.97 percent from $3.802 billion achieved in the final quarter of 2019 to $5.854 billion in Q1 2020.
However, this was 31.19 percent lower than the first quarter of 2019.
A breakdown of the report shows that the largest amount of capital inflow into the country was through Portfolio investment that accounted for 73.61 percent or $4.309 billion of the total capital imported during the period under review.
Other Investments followed with 22.73 percent or $1.330 billion of the total capital brought into the country. While the Foreign Direct Investment (FDI) came third with 3.66 percent or $214.25 million.
A sectorial analysis revealed that the banking sector attracted the most capital inflow, accounting for $2.990 billion of the total capital imported during the period.
The United Kingdom remains Nigeria’s top source of capital investment in Q1 2020, investing a whopping $2.908 billion or 49.68 percent of the total capital in the economy.
Lagos, Nigeria’s commercial capital, also remains its position as the top investment destination in the country, receiving a total sum of $5.135 billion or 87.72 percent of the total capital inflow.
The NBS reported that “Standard Chartered Bank Nigeria Limited emerged at the top of capital investment in Nigeria in Q1 2020 with $1.656 billion. This accounted for 28.30 percent of the total capital inflow in Q1 2020.”
The surged in capital inflow has helped the Central Bank of Nigeria managed the drop in foreign reserves better, especially with revenue generation at a record-low and crude oil price trading at 61 percent below its original price.
OPEC and allies have agreed to cap crude oil production by 9.7 million barrels per day in June to artificially boost low oil prices and rebalance the global oil market.
However, experts doubt Russia and other members of the group now known as OPEC plus can abide by the new accord given economic uncertainties and surge in global risk level.
