Nigeria’s Capital Inflow in Q2 Hits $5.5b—NBS
The National Bureau of Statistics (NBS), says the total value of capital importation into Nigeria stands at $5.5 billion in the second quarter, with flighty portfolio investors contributing 74.7 per cent.
The NBS disclosed this in its “Nigeria Capital Importation (Q2 2018)’’ report released on Tuesday in Abuja.
The report noted that the value showed a 12.53 per cent decrease compared to the first quarter and a 207.62 per cent increase compared to the second quarter of 2017.
According to the bureau, the decline recorded in the second quarter is due to a decline in portfolio and other investments, which declined by 9.76per cent and 24.07per cent respectively.
It said the largest amount of capital importation by type was received through portfolio investment.
“This accounted for 74.7per cent ($4.119 billion dollars) of total capital importation, followed by other Investment, which accounted for 20.5per cent ($1.132 billion dollars) of total capital.
“This is followed by Foreign Direct Investment FDI, which accounted for 4.7per cent ($261.4million dollars) of total capital imported in the second 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. 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 Importation in the quarter under review, followed by Other Investments, and then FDI. The chart below shows the composition of Capital Importation in Q2, 2017 and Q2, 2018.
Foreign Direct Investment (FDI)
In the second quarter of 2018, total Foreign Direct Investment stood at $261.35m, growing by 5.97% from the first quarter of the same year, but falling by 4.75% when compared to the corresponding quarter of last year. FDI represented only 5% of the total capital import. Equity Investment dominated FDI in the second quarter, accounting for 97.85% of the 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 1000percent 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% Q-on-Q decrease 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.