Nigeria’s economic landscape is aglow with optimism as the country welcomes a substantial influx of capital in the first quarter of 2023.
According to the Central Bank of Nigeria’s (CBN) Economic Report for Q1, $17.18 billion in capital was poured into the nation’s economy during this period.
This figure represents an increase of 7.5 percent when compared to the preceding quarter’s $14.62 billion.
The inflow underscores growing investor confidence in Nigeria’s economic potential and also signals positive momentum for the country’s economic recovery and growth prospects.
This influx of capital can be attributed to various factors, including favorable investment opportunities, improved business climate, and a resilient economic outlook.
However, the report also reveals a fiscal challenge facing the federal government, with a deficit of N1.43 trillion recorded during the review quarter.
Despite this challenge, the overall picture remains optimistic, with the economy showing signs of robustness and resilience.
The breakdown of the capital inflow shows foreign exchange inflow through the CBN increasing to $7.17 billion, compared to $6.21 billion in the previous quarter.
Also, inflows through autonomous sources saw substantial growth, reaching $10.08 billion, up from $8.41 billion in Q4.
On the other side of the equation, FX outflows through the economy experienced a 12.8 percent increase, totaling $9.98 billion, while outflows through the central bank surged by 17.9 percent to $8.86 billion.
Autonomous outflows, however, decreased by 16.2 percent, amounting to $1.12 billion.
The net result of these dynamics was a significant 24.7 percent increase in net FX inflow into the economy, totaling $7.20 billion, up from $5.78 billion in the preceding quarter.
Also, net inflow through autonomous sources rose to $8.89 billion compared to $7.08 billion in the previous quarter. Nevertheless, a net outflow of $1.69 billion was recorded through the apex bank.
In the face of these fiscal challenges, it’s worth noting that the federal government’s provisional fiscal deficit, while 9.6 percent higher than the preceding quarter, remained 22.1 percent below the target, demonstrating a commitment to fiscal prudence.
