Capital Import Into Nigeria Drops By 33.7 Percent In One Year
BEVERLY HILLS, November 07, (THEWILL) – The National Bureau of Statistics, NBS, has released the capital importation report for the third quarter of 2016, with the country recording an increase of $1.82bn (74.84 per cent) in investment inflow from $1.04bn in the second quarter.
The bureau in the report which was released on Monday however pointed out that the capital imported into the country represents a decline of 33.7 per cent when compared with the inflow in the relative third quarter of 2015.
An analysis of the recent 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.
Three major categories of investments that make up the total investment inflow into the country include: portfolio investments, foreign direct investments and other investments.
The report similar revealed that foreign direct investment, FDI, rose by 84.8 percent 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 NBS 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.
It stated that this is the highest monthly amount brought into the country by investors since July 2015, adding that in the month of September, the country recorded a total investment inflow of $649.76m.
According to the report, this 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,” it 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.
As regards 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.