Nigeria got $12.2b capital inflows in 2017, says NBS

The value of capital imported into Nigeria for the full year ended December 31, 2017 stood at $12.2 billion, a report from the National Bureau of Statistics (NBS) released yesterday said. The figure represents massive improvement from $5.38 billion recorded in the previous year.

It also said that capital importation for the fourth quarter of last year rose by 29.9 percent to $5.32 billion, as economic activity improved after the first recession in over 25 years.

Capital imports were over $4 billion in the third quarter, the first such quarterly rise since 2015. The rise was driven by portfolio and other investments, the NBS said. Portfolio investment accounted for the largest amount of capital imported in the fourth quarter of 2017, driven by strong growth in money market instruments, the statistics office said.

The data on capital importation was obtained from the Central Bank of Nigeria (CBN) and compiled using information on banking transactions gathered through Electronic Financial Analysis and Surveillance System (e-FASS) software, which enables automatic reporting of all banking transactions to CBN.  “The growth in capital Importation in 2017 was mainly driven by an increase in portfolio investment, which went up by $5.51 billion from the previous year to reach $7.32 billion in 2017, and accounting for 60 per cent of capital imported. During the reference quarter total capital imported when compared to the previous quarter increased by $1.23 billion,” the report said.

The NBS report said capital importation was divided into three main investment types: Foreign Direct Investment (FDI), Portfolio Investment and Other Investments, each comprising various sub-categories. Portfolio Investment, which recorded $3.47 billion in fourth quarter of 2017, remained the largest component of capital imported and contributed 64.6 per cent of the total amount. It increased significantly year on year, recording a rise of 1,123.5 per cent  or $3.1 billion (from $284.2 million to $3.47 billion), expanding faster than the two other components of capital importation.

Foreign Direct Investment recorded $378.4 million in quarter four, which is a year on year increase of 9.8 per cent.

It said that in fourth quarter of 2017, Foreign Direct Investment hit $378.4 million for the first time since fourth quarter of 2015 when it reported $123.2 million. This figure in fourth quarter 2017 was a substantial increase of 221.8 per cent when compared to the third quarter, and a 9.8 per cent increase compared to fourth quarter of 2017. The growth in FDI was mainly driven by equity investments, which contributed 99.8 per cent, while other capital investment contributed 0.2 per cent.

Banking was the second leading sector to attract the highest amount of capital inflow, attracting $543.4 million or 10.1 per cent of total capital, an increase of 5.8 per cent from the previous quarter.

Next to Banking was Production, which had 5.9 per cent to total capital investment. Capital Importation to Servicing dropped from $586.97 million in the previous quarter to $216.45 million in the fourth quarter, while $99.4 million flowed to Fishing sector. Capital Importation to Telecommunications, Financing and Construction sectors also increased strongly compared to the previous quarter.

According to the figures for the fourth quarter of 2017, Abuja attracted the highest amount of foreign capital, accounting for $2.68 billion or 49.8 per cent. This was an increase of 227.8 per cent from the figure recorded in the third quarter of 2017 ($817.6 million). Lagos which has always had the highest share of capital importation, had its share drop from 79.5 per cent of total share in third quarter of 2017, to a share of 47.4 per cent in fourth quarter of 2017. Other states including Akwa Ibom, Ogun, Oyo and Delta also attracted foreign capital investments.

The country from which Nigeria imported the most capital from was the United Kingdom, which accounted for $1.6 billion, or 30 per cent of the total of capital inflow in fourth quarter of 2017. This value was a decline of 7.3 per cent relative to the figure in the previous quarter, and a 233.4 per cent growth over the corresponding period of last year.

The country accounting for the second largest value of capital importation was the United States.

The US accounted for $1 billion in the fourth quarter of 2017, or 18.6 per cent.

Capital is imported through financial institutions into the country. In the fourth quarter of 2017, the bank through which the highest share of capital was imported was Stanbic IBTC Bank Plc, which accounted for 50.7 per cent ($2,730.5 million) of the total share, up from the 40.2 per cent share recorded in the third quarter of 2017.

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