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Nigeria gets N560b capital inflow in third quarter, U.K. accounts for highest of 60%, U.S. 23%

By Adeyemi Adepetun
11 November 2016   |   1:23 am
Data from the National Bureau of Statistics (NBS) have shown that Nigeria recorded $1.822 billion (N560 billion at N307.7 to $1) as capital imported in the third quarter of 2016.
 National Bureau of Statistics

National Bureau of Statistics

Data from the National Bureau of Statistics (NBS) have shown that Nigeria recorded $1.822 billion (N560 billion at N307.7 to $1) as capital imported in the third quarter of 2016.

Capital importations are Central Bank of Nigeria (CBN) certificates issued by banks for the importation of cash (foreign currency inflow) for investment as equity or loan, and also for the importation of machinery and equipment for investment as equity or loan.

NBS revealed yesterday that the country from which Nigeria imported by far the most capital was the United Kingdom, which accounted for $1,097.59 million, or 60.24 per cent of the total.

The country to account for the second largest value was the United States, which accounted for $426.98 million, or 23.43 per cent of the total. As in the case of the UK, the U.S. retained its position as the second largest investor in Nigeria in most quarters since 2010.

Netherlands, according to the report, accounted for $94.44 million, or another 5.18 per cent of the total value. These three countries together accounted for roughly nine tenths of total capital imported into Nigeria.

The report also showed that in the period under review, 34 different countries were active in investing in Nigeria. This is two more than in the previous quarter, but less than in the same quarter of 2015 when there were 42 countries from which Nigeria imported capital.

The $1.822billion, according to NBS represents an increase of 74.84 per cent relative to the second quarter, and a fall of 33.70 per cent relative to the third quarter of 2015.

NBS claimed that the highest level of capital imported was in August, when $894.00 million was imported, the highest level since July 2015.

In September $649.76 million was imported, which was still more than any month in the first and second quarters.In contrast with the previous quarter, where other loans explained the majority of the increase, a number of investment types contributed to the quarterly increase.

According to NBS, much of the quarterly increase in the value of capital importation came from debt financing. Of the total quarterly increase, 85 per cent was accounted for by increases in portfolio investment in bonds and money market instruments; the latter of which comprises short-term funding securities such as treasury bills and commercial bills from CBN.

The report said the quarterly growth in foreign direct investment (FDI) equity was also strong, though portfolio equity continued to decline, stressing that FDI investments have a longer-term interest, and are therefore less likely to reflect short-term challenges than portfolio Equity.

Nevertheless, NBS explained that each type of investment (FDI, portfolio and other) recorded quarterly increases, of 84.84 per cent, 172.84 per cent and 7.80 per cent respectively. It stressed that the relatively strong growth in portfolio investment meant it regained its position as the largest investment type, and it accounted for 50.51 per cent in the third quarter, compared to 18.69 per cent and 30.80 per cent for other investment and FDI respectively.

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