Emmanuel OchayiNBS Releases New Data on Capital Importation
Nigeria’s capital importation in the second quarter of 2024 reached $2.60 billion, according to a fresh report from the National Bureau of Statistics (NBS). This reflects a significant 152.81 per cent increase from $1.03 billion recorded in the same quarter of 2023.
Despite this yearly growth, the report showed a 22.85 per cent decline compared to the $3.38 billion reported in the first quarter of 2024, suggesting a decrease in investor confidence amid economic uncertainties.
Join our WhatsApp ChannelAccording to the NBS, “Total capital importation into Nigeria stood at $2,604.50 million in Q2 2024, higher than the $1,030.21 million recorded in Q2 2023, showing a growth of 152.81%. However, compared to Q1 2024, there was a decline of 22.85%.”
Portfolio Investments Lead Capital Inflows
Portfolio investments made up the largest portion of the capital importation, contributing $1.40 billion, or 53.93 per cent of the total. These investments involve foreign investors injecting capital into Nigerian stocks, bonds, and other financial instruments, seeking quick returns.
An NBS representative explained, “Portfolio investments continue to dominate capital inflows. However, the slight decline from Q1 2024 is a reflection of the cautious sentiment among investors due to domestic and global economic uncertainties.”
Other forms of investment, such as loans, trade credits, and debt financing, accounted for $1.17 billion, representing 44.92 per cent of the total.
Foreign Direct Investment Lags
Foreign Direct Investment (FDI) accounted for a mere $29.83 million in Q2, making up just 1.15 per cent of the total capital inflows. This is a concerning trend, as Nigeria has long sought to attract more FDI to promote long-term growth.
“The low FDI figure is a reminder of the challenges we face in attracting sustainable investments,” noted an economist familiar with the report. “FDI plays a crucial role in job creation and infrastructure development, but it remains elusive.”
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NBS Data Shows Sector Breakdown
The NBS report highlighted that the banking sector was the biggest beneficiary of capital importation, receiving $1.12 billion, which is 43.15 per cent of the total inflows. This emphasizes the role of banks in facilitating foreign investments.
Other sectors also received significant inflows. The production and manufacturing sector attracted $624.71 million (23.99 per cent), indicating a positive outlook for industrial activity. The trading sector recorded $569.22 million, representing 21.86 per cent of the total.
Lagos and Abuja Lead Capital Importation
Geographically, Lagos State received the lion’s share of capital inflows with $1.37 billion, or 52.52 per cent of the total, maintaining its position as Nigeria’s investment hub.
Abuja (FCT) followed with $1.24 billion, accounting for 47.48 per cent of the total, while Ekiti State saw minimal inflows with just $0.0003 million, indicating a lack of investment interest in smaller states.
Top Countries Contributing to Capital Inflows
The NBS report identified the United Kingdom as the largest source of capital importation into Nigeria, contributing $1.12 billion (43.01 per cent) of the total inflows. The Netherlands followed with $577.82 million (22.19 per cent), and South Africa was third with $255.98 million (9.83 per cent).
Among the banks, Citibank Nigeria Limited led the inflows, handling $818.46 million (31.43 per cent), followed by Standard Chartered Bank Nigeria Limited with $654.79 million (25.14 per cent), and Rand Merchant Bank Plc with $488.59 million (18.76 per cent).
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
