Capital Importation into Nigeria decreases – NBS

The total value of capital importation into Nigeria in the second
quarter (Q2) of the year stood at $5.51 billion, a National Bureau of
Statistics (NBS) report has shown.

The report, which was published on the bureau’s website, Monday,
showed that the figure for Q2, when compared to the figure recorded for
first quarter of the year decreased by 12.53 per cent.

There was also a decrease of about 207.62 per cent when compared to the figure recorded for the second quarter of 2017.

Capital Importation can be divided into three main investment types:
Foreign Direct Investment (FDI), Portfolio Investment and Other
Investments, each comprising various sub-categories.

The report said the decline in Portfolio and Other Investments by
9.76 per cent and 24.07 per cent respectively was the reason behind the
decline recorded in the second quarter.

According to the NBS, the largest amount of capital importation was
received through portfolio investment, which accounted for 74.7 per cent
($4,119.5m) of total capital importation.

“Since 2017 Q2, Portfolio Investment has been expanding faster than
the other two categories. Although the absolute value of Portfolio
Investment declined in Q2 on a quarterly basis, falling from $4,565.09
million in Q1, 2018 to $4,119.46 million in Q2, 2018, it remained the
largest component of the total capital imported,” the report showed.

Other investment followed portfolio investment as it accounted for
20.5 per cent ($1.132.8 million) of the total capital imported.

The report showed that this category continued its decline since the
beginning of 2017, from $1.52 billion in Q4, 2017 down to $1.49 billion
in the first quarter of this year and further falling by 24.07 per cent
in the second quarter.

“This category accounted for 20.5% of total Capital Importation in
the second quarter of 2018. As in previous periods, Other Investment was
dominated by Loans ($1,121.66 million), which accounted for over 99% of
Other Investments in the reviewing quarter. Other Claims fell sharply,
from $223.49 million in Q1 to $11.08 million in Q2. Trade Credits and
Currency Deposits posted no inflow in the second quarter of 2018,” the
NBS disclosed.

Foreign Direct Investment (FDI) accounted for 4.7 per cent ($261.4
million) of total capital imported in the second quarter. In the second
quarter of 2018, total Foreign Direct Investment stood at $261.35
million, growing by 5.97 per cent from the first quarter of the same
year, but falling by 4.75 per cent when compared to the corresponding
quarter of last year.

As a form of analysis of the data on portfolio investment, the report
showed that, “Equity Investment dominated FDI in the second quarter,
accounting for 97.85 per cent of total FDI received in the second
quarter. Capital Importation in the form of Other Capital saw
significant expansion, from only $5,000 as recorded in Q1 to $5.63
million in Q2, an increase of over 1000 per cent compared to the same
period of last year.

“Portfolio Investment remained the most significant component of
total capital inflow into Nigeria in the second quarter of 2018,
although it contracted by 9.76% over the previous quarter. The total
value of Portfolio Investment in Q2 recorded was $4,119.46 million,
which was a 434.64% growth compared to Q2, 2017 ($770.51 million). The
9.76 per cent decrease compared to the previous quarter was due to a
fall in the largest sub-component– Money Market Instruments.

“Capital Importation in the form of Money Market Instrument stood at
$2,670.93 million in the second quarter, which was a 24.29% decrease
over the previous quarter. Investments in both Equity and Bonds (under
Portfolio Investments) reported steady quarter-on-quarter growth, with
49.43% and 19.13% respectively. It is worth noting that investments in
Bonds under this Capital Importation type has been steadily increasing
since Q2, 2017, and in Q2 2018, it accounted for 9.71% of total
Portfolio Investment.”