Despite the inflow into the primary sectors such as production, banking and shares, Nigeria’s foreign capital importation dropped by 9.04 percent in the second quarter (Q2) of 2023, compared to Q1 2023.
According to the National Bureau of Statistics (NBS) report, the total capital imported in Q2 2023 was $1.03 billion, down from $1.13 billion in Q1 2023.
NBS said the primary sources of foreign capital were the United States, Singapore and South Africa.
On investments, accounting and finance raked the most capital imports, recording 81.28 percent ($837.34 million) of all capital imports. Lagos State continued its dominance in the capital importation ranking, raking in $778.06 million, representing 75.52 percent of total imports.
In the second quarter of 2023, First Bank of Nigeria Limited attracted the most substantial capital inflow into Nigeria, amounting to $323.13 million, representing 18.23 percent of the total.
Analysts believe the depleting macroeconomic indicators have doused foreign investors’ earlier optimism about the country. The persistent foreign exchange (FX) repatriation challenges, naira depreciation and worsened insecurity remain a deterrent to attracting foreign investment and effective measures must be addressed to entice investors.
In Q4 2022, total capital importation into Nigeria stood at $1,060.73 million, lower than $2,187.63 million recorded in Q4 2021, indicating a decrease of 51.51 percent. When compared to the preceding quarter, capital importation also fell by 8.53 percent from $1,159.67 million in Q3 2022.
The largest capital importation during the period was received from other investment, which accounted for 65.17 percent ($691.23 million) of total capital imported in Q4 2022. This was followed by portfolio investment with 26.89 percent ($285.26 million) and Foreign Direct Investment (FDI) with 7.94 percent ($84.23 million).
Disaggregated by sectors, capital importation into the production sector recorded the highest inflow of $392.54 million in Q4 2023, representing 37.01 percent of total capital imported in Q4 2022. This was followed by capital imported into the banking sector, valued at $255.45 million (24.08 percent) and telecoms with $168.27 million (15.86 percent).
Capital importation by country of origin reveals that capital from the United Kingdom ranked top in Q4 2022 with $455.24 million, accounting for 42.92 percent. This was followed by the Republic of South Africa and the United Arab Emirates valued at $119.31 million (11.25 percent) and $116.82 million (11.01 percent) respectively.
By destination of investment, Lagos State remained the top destination in Q4 2022 with $600.54 million, accounting for 56.62 percent of total capital investment in Nigeria. This was followed by Abuja (FCT), valued at $424.50 million (40.02 percent).
Categorisation of capital importation by banks shows that Citibank Nigeria Limited ranked top in Q4 2022 with $308.72 million (29.10 percent). This was followed by Standard Chartered Bank Nigeria Limited with $232.45 million (21.91 percent) and Rand Merchant Bank with $102.00 million (9.62 percent). However, on annual basis, capital importation was $5,328.88 million in 2022, a decrease of 20.47 percent from $6,700.51 million in 2021.
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