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Capital Importation Declines by 8.53%

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CEM REPORT, FINANCE | Capital Importation declined by 8.53 per cent. to $1.06 billion in Q4 2022 from $1.16 billion in Q3 2022.

This is also a 51.51 per cent decline from the $2.19 billion recorded in Q4 2021.

The National Bureau of Statistics (NBS) in its Nigeria Capital Importation Q4 2022 report recently released revealed that the largest contributor to capital importation during the period was from Other Investment, which accounted for 65.17% of $691.23 million of total capital imported in Q4 2022.

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“This was followed by Portfolio Investment with 26.89% (US$285.26 million) and Foreign Direct Investment (FDI) with 7.94% $84.23 million”

A sectorial breakdown of the report reveals that the production sector accounted for 37.01 per cent of total inflow representing $392.54 million, making it the highest sectorial contributor in the review quarter.

The banking sector came far behind with $255.45 million representing 24.08 per cent, while telecommunications contributed $168.27 million which stands at 15.86 per cent of total DFI into the nation.

Other sectors include share and trading with over five per cent each while oil and gas contributed only 0.21 per cent of the total inflow.

Categorization of Capital Importation by Banks shows that Citibank Nigeria Limited ranked top in Q4 2022 with $308.72 million (29.10%), followed by Standard Chartered Bank Nigeria Limited with $232.45 million (21.91%) and Rand Merchant Bank with $102.00 (9.62%).

“On an annual basis, capital importation was $5.328.88 million in 2022, a decrease of 20.47% from $6,700.51 million in 2021.”

The recent fall in capital importation has been attributed to rising business risk, insecurity, recent political risk and foreign exchange market rigidity, including the high arbitrage between official and black markets.

Furthermore, on a State-by-State analysis, Lagos accounted for 68 per cent of the inflow which is $3.61 billion, making it the top destination for capital Importation.

The Federal Capital Territory (FCT) recorded $1.63 billion representing 31 per cent.

About 27 states, including, Bayelsa, Borno, Cross Rivers, Ogun, Rivers and Delta, did not receive inflow in the quarter.

The report noted that by Country of Origin reveals capital from the United Kingdom ranked top in Q4 2022 with US$455.24 million, accounting for 42.92%.

“This was followed by the Republic of South Africa and the United Arab Emirates valued at US$119.31 million (11.25%) and US$116.82 million (11.01%) respectively.”

Nigeria’s capital inflow declined all year long in 2022 as capital importation between January and November 2022, representing a 12.3% decline when compared to $5.89 billion recorded in the corresponding period of 2021.

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