Nigeria’s Capital Investment Inflows Drop To $1.29bn In Q2 2020

 

The total value of capital importation into Nigeria dropped to $1.29 billion in the second quarter of 2020 from the $5.854 billion reported in the first quarter of 2020, latest data from the National Bureau of Statistics shows.

The NBS in its Q2 2020 Nigerian Capital Importation report released on Friday, the decrease by 77.88% was largely contributed by the Covid-19 pandemic and measures imposed globally to contain the spread of the virus.

According to the report, portfolio investment which had always performed well in previous quarters fell to the second-largest amount of importation by type, declining by 29.76% to $385.32 million.

“The total value of capital importation into Nigeria stood at $1,294.94m in the second quarter of 2020. This represents a decrease of -77.88% compared to Q1 2020 and -78.60% in Q2 2019.

“The largest amount of capital importation by type was received through Other investment, which accounted for 58.77% ($761.03m) of total capital imported, followed by Portfolio Investment, which accounted for 29.76% ($385.32m) and Foreign Direct Investment (FDI), which accounted for 11.47% ($148.59m) of total capital imported in Q2 2020.”

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As contained in the report, United Kingdom retained the top source of capital investment in Nigeria in the review quarter, with $428.83 million, accounting for 33.12% of the total capital inflow in Q2 2020.

“By Destination of Investment, Lagos state emerged as the top destination of capital investment in Nigeria in Q2 2020 with $1,130.49m. This accounted for 87.30% of the total capital inflow in Q2 2020.

“By Bank, Standard Chartered Bank Nigeria Limited emerged at the top of capital investment in Nigeria in Q2 2020 with $425.21m. This accounted for 32.84% of the total capital inflow in Q2 2020,” the report stated.

Covid-19 Impact

The country’s Foreign Direct Investment in the quarter stood at $148.59 million, it’s quarterly lowest in about 3 years, largely due to the ravaging impact of the Covid-19, which saw lots of investors play a wait-and-see game at the initial stage of the outbreak this year.

Although the figures in Q1 was at $214.25 million, the Q2 remittance shows the effect of the global economic lockdown in the country.

A 2020 report by the United Nations Conference on Trade and Development (UNCTAD) ranked Nigeria third host economy for FDI in Africa, behind Egypt and Ethiopia, with remittances totaled to $3.3 billion in 2019.

The Federal Government has embarked on a few reforms in policies including the ease of doing business, Companies and Allied Matters Act, and a host of others.

In 2016, President Muhammadu Buhari set up the Presidential Enabling Business Environment Council (PEBEC) to come up with modalities to reduce the bottlenecks and constraints in running a business by local and foreign investors in the country.

Part of the result was seen in the World Bank’s Doing Business 2020 index, where Nigeria ranked 131, moving up 15 places from its 2018 spot, tagged as one of the most improved economies in the world.

Nigeria Records 54 Percent Increase In Capital Importation

Nigeria is the largest economy in Africa.
Nigeria is the largest economy in Africa.

 

The value of capital importation into the country grew by 54 percent to $5.85 billion in the first quarter of the year 2020 from $3.8 billion recorded in the fourth quarter of 2019.

The National Bureau of Statistics (NBS) disclosed this on Monday in its Q1 2020 Capital Importation Report.

The data from the NBS shows the largest amount of capital importation by type was received through portfolio investment, which accounted for 73.61 percent of total capital.

This is followed by other investments, accounting for 22.73 percent, and foreign direct investment, which accounted for 3.66 percent of total capital imported in Q1 2020.

By sector, banks dominated capital importation in the period under review by $2.99 billion while the United Kingdom emerged as the top source of capital investment in Nigeria with $2.90 billion.

By destination of investment, Lagos State emerged as the top destination of capital investment in Nigeria in Q1 2019 with $5.13 billion accounting for 87.72 percent of the total capital inflow in Q1 2020.

Capital Importation Into Nigeria Declines By 7.7%

 

Fresh statistics released by National Bureau Of Statistics (NBS) on Monday revealed that the bulk of capital importation into Nigeria declined by 7.7%.

The report shows that total value of capital importation into Nigeria stood at $5,367.56 million in 2019 third quarter (July to September).

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This represents a decrease of -7.78% compared to 2019 second quarter and 87.99% increase compared to the third quarter of 2018.

The report added that the largest amount of capital importation by type was received through Portfolio investment, which accounted for 55.88% ($2,999.50million) of total capital importation.

This is followed by Other Investment, which accounted for 40.39% ($2.167.98million) of total capital, and then Foreign Direct Investment FDI, which accounted for 3.73% ($200.08m) of total capital imported in Q3 2019.

By sector, Capital importation by banking dominated 2019 third quarter reaching $1,756.83 million of the total capital importation in Q3 2019.

Also, the report shows that the United Kingdom emerged as the top source of capital investment in Nigeria in Q3 2019 with $2,011.14million.

“This accounted for 37.47% of the total capital inflow in Q3 2019.”

By Destination of Investment, Lagos State emerged as the top destination of capital investment in Nigeria in 2019 third quater with $4,976.40 million.

This according to the report accounted for 92.71% of the total capital inflow in  2019 third quater.