According to the National Bureau of Statistics (NBS), Nigeria’s capital importation experienced a significant decline of 22.85% in the second quarter of 2024, dropping from $3.37 billion in Q1 to $2.60 billion in Q2. However, when compared to the same quarter last year, capital importation increased by 152.8%, rising from $1.03 billion.
Breakdown of Capital Imports
- Types of Investment:
- Portfolio Investment: Led the way with $1.40 billion, accounting for 53.93% of total capital importation.
- Other Investment: Followed closely with $1.169 billion, making up 44.92%.
- Loans constituted the bulk of this category, amounting to $1.15 billion (98.6% of other investments).
- Other claims received just $16 million during the quarter.
- Foreign Direct Investment (FDI): Contributed the least, with only $29.83 million (1.15%), a trend that has been observed in recent quarters.
- Portfolio Investment Details:
- Equities: Made up 10.67% of total portfolio investment, totaling $149.93 million.
- Money Market Instruments: Dominated portfolio investments with $1.07 billion (76.6%).
- Bonds: Accounted for 12.6% of portfolio investments, totaling $177.79 million.
Sectoral Breakdown
- The banking sector attracted the most capital, receiving $1.12 billion (43.15% of total capital importation).
- The Production/Manufacturing sector followed with $624.71 million (23.99%).
- The Trading sector secured $569.22 million (21.86%).
Origin of Capital Importation
- The United Kingdom was the largest source of capital inflow, contributing $1,120.15 million (43.01%).
- This was followed by the Netherlands with $577.82 million (22.19%) and the Republic of South Africa with $255.98 million (9.83%).
Conclusion
The decline in capital importation signals challenges within Nigeria’s economic landscape, despite significant growth compared to the previous year. The predominance of loans in other investments raises questions about the sustainability of this capital inflow, particularly in light of the recent increases in the Monetary Policy Rate (MPR), which may be affecting foreign direct investment negatively.
News Editor