Nigeria received $5.36 billion capital importation (inflows) in the third quarter (Q3) of 2019, compared to $5.82 billion in the second quarter (Q2). This is the lowest amount of capital importation received in the year.
According to the latest capital importation report released by the National Bureau of Statistics (NBS), $5.36 billion capital importation received in the third quarter represents a -7.78% contraction from the total amount ($5.82 billion) received within the second quarter (Q2). Meanwhile, year-on-year, capita inflows rose by 87.99%.
Capital Inflows by Type
Nigeria’s capital importation is categorized into three investment types, and these include Portfolio Investment, Foreign Direct Investment (FDI) and Other Investment.
In Q3 2019, the largest amount of capital importation by type was received through portfolio investment, which accounted for 55.88% ($2.99 billion) of total capital importation, followed by Other Investment, 40.39% ($2.16 billion) of total capital, and then Foreign Direct Investment, which accounted for 3.73% ($200.08m) of total inflows within the period.
Foreign Direct Investment (FDI): FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. In the latest report, FDI constituted only 3.73% ($200.08 million) of total capital inflows in Q3 2019, this represents the lowest across all forms of capital inflows in the country. The breakdown of FDI shows that investment in equity amounted to $196.38 billion, while other capital stood at $3.70 million.
The Portfolio Investment: During the period under review, the largest amount of capital importation by type was received through portfolio investment, which accounted for 55.88% ($2.99 billion) of total capital importation in Nigeria.
Under the portfolio category, investment in money market instruments remains the largest recipient of capital inflows with a total of $2.54 billion, followed by $196.36 billion in equity, while investment in bonds stood at $91.60 billion.
Other Investment: According to the NBS report, other investment is broken down into four categories which include Trade credits, Loans, Currency deposits and other claims. However, the bureau only provided details for loans and other claims. In the third quarter of 2019, other investments recorded the second-largest capital importation, accounting for 40.39% ($2.16 billion) of total capital importation.
Capital inflows by Sectors
Further analysis of the capital importation shows that ten major sectors of the sixteen sectors recorded a decline in capital importation. The sectors (nature of business) that witnessed major decline within the quarter include Shares, Agriculture, Banking, Brewing, Construction, Consultancy, Financing, Fishing, Hotels, Production, Servicing and Transport.