Latest data from the National Bureau of Statistics shows Nigeria’s capital importation dropped by a whopping 46.8% to N$5.1 billion on a year on year basis. Capital importation represents the total value of foreign direct and portfolio investments into Nigeria in any given period.
Total value of capital imported into the country declined by 15% to $1.548 billion dollars in the fourth quarter of 2016 compared to $1.8 billion dollars in the previous quarter. There was also a decline of 0.52% compared to the corresponding period in 2015. Q3 2016 saw the highest level of capital importation for the year at $1.8 billion dollars. Q1 2016 witnessed the lowest of level of capital importation at $0.710 million dollars.
Data also shows that in the year 2016, capital importation fell by 46.86%, from $9.64 billion in 2015 to $5.12 billion. This was the lowest value since the series started in 2007, according to the Bureau of Statistics. The figure reflects the numerous economic challenges that afflicted Nigeria in 2016, the bureau opines. The weakening of the naira may have had an impact: a weaker naira means more can be purchased with each dollar, and therefore investment projects
Despite the decline in foreign capital, both Foreign Direct Investment (FDI) and Foreign Portfolio Investment increased quarter on quarter in 2016. FDI had the most consistent increase with $170.84 million in Q1 2016 to $344.57 million in the fourth quarter of 2016. FPI moved from $271 million in Q1 2016 to $278 million in the last quarter of 2016. Q3 2016 saw a massive FPI inflow however at $920.32 million dollars
Telecoms, oil and gas as well as banking had the highest proportion of foreign capital imported into the country in Q4 2016. Nigeria imported the most foreign capital from the United Kingdom in Q4 2016, followed closely by the Netherlands and the United States.
Portfolio investment on shares had the largest proportion of capital inflow spending in the country in 2016. This was followed closely by banking, and oil and gas.
Critics blame the low capital importation to the policies of the Central Bank which has chased away potential foreign investors from looking the way of Nigeria and preferring other African countries such as kenya, Ghana and even Egypt.