The Capital Importation into Nigeria has fallen by 31.41% in the Q2 2019 to a total $5,820.21m as against $8,485.49 million recorded in the Q1 2019. The figure represent 5.56% increase compared to the $5,513.55 million recorded in Q2 2018. This is as contained in the Capital Importation Report published by NBS on their website.
The report further revealed that Portfolio investment accounted for 73.76% ($4,292.89m) of total capital importation, while Other Investment accounted for 22.41% ($1,304.43m). Foreign Direct Investment, FDI accounted for 3.83% ($222.89m) of total capital imported in Q2 2019.
By sector, Capital importation by banking dominated in Q2 2019 reaching $1,892.50m of the total capital importation in Q2 2019. This was followed by Financing with $1,652.45m worth of foreign investment while Shares followed thirdly with $1,119.91m. From behind, Brewering, Tanning, Weaving and Drilling sectors got no Investment from outside. Marketing got the least of $0.03m followed by Consultancy with $1.05m and Transport with $3.43m
$3,134.47m representing 53.85% of the total capital inflow came from the United Kingdom making it the top source of capital investment in Nigeria in the quarter under review. This followed by the United States of America with capital inflow of $1,150.82 and UAE with $343.59. The least capital importation came from Canada with $0.01m.
By Destination of Investment, NBS reported that Lagos state emerged as the top destination of capital investment in Nigeria in Q2 2019 with $4,137.66m. This accounted for 71.09% of the total capital inflow. In this regard,
By Bank, Stanbic IBTC Bank Plc emerged at the top of capital investment in Nigeria in Q2 2019 with $1,765.64 million. This accounted for 30.34% of the total capital inflow in Q2 2019.
Equity Investment contributed $496.84m to the Portfolio Investment representing a decline of 24.28% from the last quarter which recorded $656.19. This is 52.61% (year-on-year) decline from $1,048.39m received in the same quarter of 2018.. Investment in Bonds which attracted $316.28m is also a decline of 40.09% (QoQ) from $565.65 received in Q1 of 2019. Other market Instrument received highest patronage of $3,479.77m in the Portfolio Investment
The wide gap between FDI and Portfolio Investment is an indication of lack of confidence in the political and economic climate of Nigeria at least for the now. Investors still exercise restrain even in the face of succinct hunt for foreign investors by different government departments. The overall indicates a volatility of foreign investment in Nigeria with its attendant vulnerability. Contribution to this widening gap is the poor state of critical infrastructure which makes business in the real sector still hostile to investment. Therefore, Investors prefer to render their money in non-lasting commitments so as to facilitate quick conversion and withdrawal at the slightest provocation.
It is hoped that with current attention on developing critical infrastructure with electricity on the top priority that Investors confidence in Nigeria will gradually strengthen
On the general note, it is understandable that the usual uncertainty that follows pre and post elections in Nigeria would impact on capital flow to the country. It is hoped that with the gradual resolution of outstanding election related cases, capital importation will regain its upward movement.