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Nigeria’s Capital Importation Declines by 30.6% Year-on-Year



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The National Bureau of Statistics (NBS) has released its latest report on capital importation for Q4 ’21. The data was obtained from the CBN and compiled using information on banking transactions from all registered financial institutions in Nigeria. The total value of capital imported in Q4 ‘21 was estimated at USD2.2bn, representing a rise of 26.4% q/q and 109.3% y/y. However, for FY ‘21, the total value of capital imported was estimated at USD6.7bn, representing a decline of 30.6%y/y from USD9.7bn recorded in 2020.

The capital importation data is gross, and not adjusted for capital exports. The category referred to as portfolio investment accounted for 29.4% and 50.5% of capital importation in Q4’21 and FY’21 respectively. Portfolio investments recorded a decline of 47.2% q/q to USD642.9m in Q4 ’21. For FY ’21, it declined by 34.1% y/y to USD3.4bn in 2021.

In Q4 ‘21, money market instruments accounted for 86.9% (USD558.9m) of total portfolio investments but declined by 29.8% q/q from USD795.7m recorded in Q3 ’21. For FY ’21, it accounted for 77.2% (USD2.6bn) of total portfolio investments. However, this is a 37% decline from the USD4.2bn recorded in 2020.

Similar to Q1, Q2, and Q3, there was relatively lower contribution from bonds to portfolio investments in Q4. Bonds contributed 7.1% (USD45.9) to total portfolio investments but declined by 87.4% q/q. For FY ’21, it accounted for 16.7% (USD564.1m) of portfolio investments and this was a y/y increase of 144% from the USD231m recorded in 2020.

Based on the data release, inflow via equities was low in Q4. This asset class accounted for just 5.9% (USD38m) of total portfolio investments. Equities segment declined by -32.7% q/q for Q4 ’21 and -72.6% y/y for FY ’21. The NGX All Share Index (ASI) posted a positive return of 6.1% for FY ’21. Data from NGX show the ratio of local to foreign investment participation at 81:19 in December ‘21.

Foreign direct investment (FDI) inflow grew by 232.3% q/q to USD358.2m in Q4 ’21 but posted a y/y decline of -65.1%. FDI inflow accounted for only 16.4% of capital importation in Q4 ’21 and 10.4% in FY ‘21. Strengthening institutional infrastructure and governance will play a critical role in attracting FDI.

From the data release, we noticed that from a sectorial perspective, capital importation into tanning recorded the highest inflow of USD645.6m, accounting for 29.5% of total capital imported in Q4 ‘21. Total foreign capital inflows into the sector totalled USD1m between Q1 ’13 – Q3 ’21.

Prior to Q4 ‘21, the relatively poor inflow into the sector could be attributed to infrastructural challenges, resulting in reduced competitiveness of domestic products. This has partly led to dumping into local markets from advanced economies across Asia and Europe. Capital inflow into the production sector and electricals sector followed with USD360.1m (16.5%) and USD325.6m (14.9%) respectively.

For FY ’21, capital imported into the banking sector was the largest at USD1.5bn and accounted for 21.8% of total capital imported in 2021. Meanwhile, capital importation by country of origin show that Mauritius ranked top as a source of capital imported into Nigeria in Q4 ‘21 with a value of USD611.5m, accounting for 27.9% of total capital inflows during the period. We note that capital inflow from the United States and South Africa followed with USD321.0m (14.7%) and USD285.8m (13.1%) respectively. For FY ’21, the largest capital inflow came from the United Kingdom with USD2.3bn and accounted for 34.2% of total capital imported in 2021.

Overall, the decline in capital importation in 2021, can be attributed to national security challenges, inadequate infrastructure and elevated headline inflation rate resulting in relatively lower real yields.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Inflation Rate Increases to 16.82% in April in Nigeria



Nigeria's Inflation Rate - Investors King

Prices of goods and services in Africa’s largest economy Nigeria rose high in the month of April, according to the latest report from the National Bureau of Statistics (NBS).

The Consumer Price Index, which measures inflation rate, grew at 16.82% rate in the month under review from 15.92% in March 2022. The inflation rate has been on a steady rise since Novermber 2021 when it drops to 15.40%.

On a month basis, inflation increased to 1.76 percent in April 2022, representing an increase of 0.02% from 1.74% recorded in March. The persistent increase in prices reflect the changes in Nigeria’s economic fundamentals. One of the key challenges impacting prices is foreign exchange scarcity.

Naira to Dollar exchange rate jumped to N600/US$1 at the parallel market popularly known as the black market despite the Central Bank of Nigeria discouraging patronage at that section of forex. However, inability to access forex at central bank designated deposit money banks forced most Nigerians to the unregulated black market.

Similarly, the drop in the nation’s external reserves due to the lower crude oil production from the year to date dragged on foreign revenue that eventually hurt central bank ability to service the economy with enough forex in an economy that imported over 90% of its consumption.

Again, rising insecurities in key food producing regions contributed to the jump in prices of food items as noted in the report. The composite food index grew at 18.37% rate in April 2022, slower than  the 22.72% filed in April 2021.

According to NBS, the increase in the value of the index was due to rise in prices of Bread and cereals, Food
products n.e.c, Potatoes, yam, and other tubers, Wine, Fish, Meat, and Oils.  On a monthly basis, food sub-index grew 0.01% to 2% in April from 1.99% in March.

However, the more accurate 12 month index reflect decline in food index from 19.21% filed in March 2022 to 18.88% in April 2022.

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ICT Changing The Face of Nigeria’s Economy



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While many thought the oil sector would save the Nigerian economy, the drift is gradually shifting away from the oil sector into the non-oil sector – the Information and Communications Technology (ICT).

A recent data revealed by the National Bureau of Statistics, sighted by Investors King, shows that the ICT has contributed 16 per cent to the growth of Nigeria’s Gross Domestic Product (GDP). 

On a year-on-year basis, compared to the previous year in the same quarter, ICT contributed 14.9 per cent to the GDP – a growth of 1.3 per cent. 

According to the data released by NBS, “In nominal terms, in the first quarter of 2022 the sector growth was recorded at 20.54 per cent (year-on-year), 12.68 per cent points increase from the rate of 7.86 per cent recorded in the same quarter of 2021, and 14.84 per cent points higher than the rate recorded in the preceding quarter. The Quarter-on- Quarter growth rate recorded in the first quarter of 2022 was -1.87 per cent.  

“The Information and Communications sector contributed 10.55 per cent to the total Nominal GDP in the 2022 first quarter, higher than the rate of 9.91 per cent recorded in the same quarter of 2021 and higher than the 9.88 cent it contributed in the preceding quarter”.   

The report added that the sector, in the first quarter of 2022, recorded a growth rate of 12.07 per cent in real terms, year-on-year.

From the rate recorded in the corresponding period of 2021, there was an increase of 5.60 per cent points. Quarter-on-Quarter, the sector exhibited a growth of -9.09 per cent in real terms.  

“Therefore, of total real GDP, the sector contributed 16.20 per cent in 2022 first quarter, higher than in the same quarter of the previous year in which it represented 14.91 per cent and higher than the preceding quarter in which it represented 15.21 per cent,” the data revealed. 

The Information and Communications sector in Nigeria comprises of Telecommunications and Information Services, Publishing, Motion Picture, Sound Recording and Music Production and Broadcasting. 

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Nigeria’s Economy Moderates in Q1 2022 as Oil Sector Contracts by 23.89%

Nigeria’s GDP moderated to 3.11% year-on-year in real terms in the first quarter (Q1) of 2022



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Despite the surge in global oil prices due to the ongoing war in Ukraine, the Gross Domestic Product (GDP) of the largest exporter of the commodity in Africa, Nigeria moderated to 3.11% year-on-year in real terms in the first quarter (Q1) of 2022, the National Bureau of Statistics (NBS) stated in its latest report.

Nigeria’s GDP was 2.60% higher than the 0.51% recorded in Q1 2021 when COVID-19 disrupted business activity and dragged on economic productivity. However, this was 0.88% lower than the 3.98% filed in the fourth quarter of 2021.

On quarterly basis, the nation’s real GDP grew at -14.66% in the quarter under review when compared to the fourth quarter of 2021.

Aggregate GDP increased by 13.25% year-on-year from N40,014,482.74 million in nominal terms in the first quarter of 2021 to N45,317,823.33 million in Q1 2022. According to the NBS, “the nominal GDP growth rate in Q1 2022 was higher relative to the 12.25% growth recorded in the first quarter of 2021 and higher compared to the 13.11% growth recorded in the preceding quarter.”

Nigeria’s Oil Sector

In the first quarter, Nigeria’s crude oil production dropped to 1.49 million barrels per day (mbpd), down from 1.72mbp achieved in the same quarter of 2021. This was also lower than the 1.50mbpd recorded in the fourth quarter of 2021. Suggesting that despite the increase in global oil prices in the quarter, Nigeria’s inability to up crude oil production impeded investment in the sector and subsequently dragged on revenue generation.

As expected, the real growth of the oil sector contracted by 26.04% year-on-year in Q1 2022, representing a decline of 23.83% when compared to the same quarter of 2021. Also, growth decreased by 17.99% when compared to -8.06% filed for Q4 2021.

On a quarterly basis, the oil sector grew by 9.11% in the quarter under review. The sector contributed 6.63% to Nigeria’s total real GDP in Q1 2022, own from 9.25% contributed in the corresponding quarter of 2021 and slightly higher than the 5.19% achieved in Q4 2021.

Nigeria’s Non-Oil Sector

As usual, the non-oil sector grew by 6.08% in real terms in the first quarter. This was better than the 5.28% recorded in the first quarter of 2021 and 1.34% higher than the fourth quarter of 2021.

The report attributed the growth in the non-oil sector to the increase in activities in the following sectors; Information and Communication (Telecommunication); Trade; Financial and Insurance (Financial Institutions); Agriculture (Crop Production); and Manufacturing (Food, Beverage & Tobacco).

Nigeria’s non-oil sector contributed the most to total economic growth. The sector contributed 93.37% to the nation’s GDP in the quarter under review.

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