…Lagos ranks 1st
From Samuel Bello, Abuja
As the economy gradually gains traction after exiting recession, the National Bureau of Statistics (NBS) yesterday disclosed that the economy attracted a capital inflow of $4.14 billion in the third quarter of this year, representing an increase of 147.5 percent on a year on year basis.
NBS, which made the disclosure in its capital importation report, released on Monday, said the inflow of capital in the third quarter was doubled compared to the second and first quarters of this year, which recorded $1.79 billion and $908.26 billion respectively.
It noted that this was the first time since 2015 that capital importation into the economy had hit over $4 billion in a quarter.
It reported that the boom in capital importation in the third quarter of 2017 was mainly driven by significant growth in both portfolio investment and other investments.
According to the report. “The capital importation into Nigeria in the 3rd quarter of 2017 recorded substantial increase compared to the past few quarters, as the economy continued to recover from recession following its exit in Q2 2017.The total capital imported in the third quarter stood at $4,145.1 million, which more than doubled the inflow in the second quarter of this year,” it said.
The NBS stated that the portfolio investment, which recorded $2.76 billion in the third quarter of 2017, remained the largest component of capital import and contributed to 67 per cent growth in the total amount.
“This component expanded faster than the other two main categories with a year on year growth rate of 200.7 per ccent. Foreign Direct Investment recorded $117.6 million which fell by 65.5 per cent year on year, while other investments increased by 124.55 per cent compared to 2016 Q3. Although other investment in Q3 2017 more than doubled the value in the third quarter of 2016 from $516.2 million to $1,260.1 million, it remained about 30 per cent of the total capital importation.
The NBS also reported that the total amount of Foreign Direct Investment (FDI) during the quarter was recorded at $117.6 million, which declined by 57.14 per cent compared to the previous quarter and 65.48 per cent compared to the third quarter of 2016 due to the fall in both equity and other capital investment.
“This category of capital investment showed a surprising decrease in value when both Portfolio Investments and Other Investment grew strongly over the third quarter. Capital import in the form of equity recorded $117.5 million and remained the majority of total FDI in the third quarter of 2017 while other capital fell from 0.3 to 0.13 million dollars from the second to the third quarter.
“Portfolio Investment in the third quarter more than tripled the figure of the second quarter of the same year, hitting $2,767.3 million. This figure was 200.7 per cent higher than the same quarter in 2016 which was recorded $920.32 million. The boom of Portfolio Investment was driven by strong growth of equity and bonds and a dramatic capital investment increase in the form of money market instruments.
“Lagos remained the state attracting most foreign capital in the third quarter of 2017. Lagos is the commercial and financial capital of Nigeria, and home to Nigeria’s Stock Exchange where shares are traded. As such, it accounted for most of the capital imported into the country ($3,297.0 million in Q3).
The NBS noted that the country from which the nation imported the most capital was the United Kingdom, which accounted for $1.7 billion, or 41.89 per cent of the total of capital inflow in the third quarter of 2017.
This value represented a 149.26 per cent increase in capital importation relative to the figure in the previous quarter, and a 58.22 percent growth over the same period in last year.
“As well as the existence of an historical relationship between the United Kingdom (UK) and Nigeria, London (the capital of the UK) is also a key financial centre, which explains the high value of foreign capital was invested by the UK. Since 2010, the UK has accounted for the highest value of capital importation in all but two quarters (both in the second half of 2015). The country accounting for the second largest value of capital importation was the United States.