Nigeria’s Q1 Capital Importation hits $6.3bn
The first quarter in 2018 saw a continuous growth in total Capital Importation into Nigeria, as the total value of capital imported in the quarter stood at $6,303.63 million, which is a year on year increase of 594.03% and a 17.11% growth over the figure reported in the previous quarter.
This increase in capital inflow in Q1, 2018 was driven mainly by Portfolio Investment, which grew from $3,477.53 million in the previous quarter to $4,565.09 million, accounting for 72.42% of the total Capital Importation during the quarter.
Capital Importation by Type
Capital Importation can be divided into three main investment types: Foreign Direct Investment (FDI), Portfolio Investment and Other Investments, each comprising various sub-categories. Since 2017 Q2, Portfolio Investment has been expanding faster than the other two categories, remaining the largest component of capital imported in Q1, 2018 at 35% of total capital imported. Foreign Direct Investment and Other Investment accounted for 3.91% and 23.67% of total Capital Importation into Nigeria in the quarter under review.
Foreign Direct Investment (FDI)
In the first quarter, Foreign Direct Investment stood at $246.62 million, falling by 34.83% from the figure reported in the previous quarter, and growing by 16.67% on a year-on-year basis. Foreign Direct Investment in Nigeria was still weak when compared to Portfolio Investment and Other Investment, representing only 3.9% of total capital imported. Equity Investment, a sub-category under FDI contributed ($246.61 million) or 99.9% of FDI during the quarter, while Other Capital under FDI contributed less than 0.001%.
Portfolio Investment remained the largest component of total capital inflow into Nigeria in the first quarter of 2018. The total value of Portfolio Investment was $4,565.1 million, which is a 1,355.66% growth compared to Q1, 2017 and a 31.27% growth compared to the figure reported in Q4, 2017. The strong growth of Portfolio Investment was mainly due to the increase in Money Market Instruments which recorded a figure of $3,527.60 million, accounting for 77.27% of total Portfolio Investments in the first quarter. This sub-category (Money Market Instruments) has grown quite significantly in the past three quarters, recording quarterly growth rates of 603% in Q3, 2017, 203% in Q4, 2017 and in 62% in Q1 2018. Portfolio Investment in the form of Equity and Bonds only recorded $701.61 million and $335.88 million respectively in the quarter under review.
Other Investment recorded $1.49 billion in the first quarter of 2018, declining by 2.29% from the previous quarter, however, growing by 289.25% compared to the corresponding period of 2017. This category accounted for 23.67% of total Capital Importation in the first quarter of 2018. As in previous periods, Other Investment was dominated by Loans ($1,27 billion), which accounted for 85.02% of Other Investments. This was followed by Other Claims ($223.49 million), which accounted for 14.98% of the category of Capital Importation. Trade Credits and Currency Deposits posted no inflow in the quarter.