The total value of capital imported into Nigeria soared by 74.84 per cent to $1.82 billion in the third quarter (Q3) of the 2016, but fell by 33.70 per cent relative to the third quarter of 2015, the National Bureau of Statistics, NBS, revealed on Monday, November 7.
The highest level of capital importation since July 2016 was in August, when $894.00 million was recorded. In September, $649.76 million was imported, which was still more than any month in the first and second quarters, the NBS stated.
The development marked the growing confidence of international investors in the Nigerian economy, following the liberalisation of the foreign exchange market.
According to the Nigerian Capital Importation Third Quarter 2016 report released by the agency, of the 34 countries that actively participated in investing in the country in the period under review, the United Kingdom accounted for the largest capital importation at $1.09 billion or 60.24 per cent of total investment.
The United States was second at $426.98 million, or 23.43 per cent of total capital importation while the Netherlands accounted for $94.44 million, or 5.18 per cent of the total value.
Altogether, the three countries accounted for almost nine-tenths of total capital imported into Nigeria, according to the statistical agency.
However, the NBS added that the quarterly increase in the value of capital importation came largely from debt financing.
Of the total quarterly increase, 85 per cent accounted for increases in portfolio investments in bonds and money market instruments, the latter of which comprised short-term funding securities including treasury bills and commercial bills from the Central Bank of Nigeria (CBN).
Quarterly growth in Foreign Direct Investment (FDI) equity was also strong, although portfolio equity continued to decline. FDI investments have a longer-term interest, and are therefore less likely to reflect short-term challenges than portfolio equity, said the NBS.
In Q3, portfolio investments accounted for the largest component of imported capital at $920.32 million, or 50.51 per cent of total capital imported.
Although portfolio equity declined by 28.12 per cent, relative to the previous quarter, this was outweighed by large increases in other types of portfolio investments.
Bonds increased from zero in Q2 to $369.00 million in Q3 while money market instruments increased by 509.03 per cent from $57.50 million to $350.20 million over the same period.
“This is the first quarter since Q2 2007 in which equity was not the largest contributor to portfolio investment; at $201.12 million this type of portfolio investment remains considerably subdued relative to previous highs of $4,930.55 million in the first quarter of 2013, and $3,875.35 million in the second quarter of 2014,” the NBS stated.
Other investment, which was the second largest component, accounted for $561.61 million, or 30.80 per cent of capital importation.
