With the current weak macroeconomic environment, it is certainly worrying times for the Nigerian economy even as its foreign inflows for first half (H1) of 2021 fell by 61.1 per cent from $7.15 billion recorded in the same period of 2020 to $2.78 billion.
According to the capital importation report which was recently released by the National Bureau of Statistics (NBS) for first quarter (Q1) and second quarter (Q2) of 2021, foreign direct investments (FDIs) stood at $232.74 million as against $362.84 million recorded in the corresponding period of the previous year.
On the other hand, foreign portfolio investments (FPIs) stood at $1.53 billion, way lower than the $4.69 billion recorded in H1 2020 while other investments stood at $1.02 billion in the review period.
A cursory look at the report showed that Nigeria’s foreign inflow has dropped significantly in the past two years, dropping to its lowest level in the past four years. The last time Nigeria imported capital lower than this period was in H1 2017 when a sum of $2.7 billion was recorded as foreign inflows.
The largest inflow during the period was through portfolio investments which stood at $1.53 billion, accounting for 54.8 per cent of the total capital inflows in H1 2021, followed by other investments ($1.02 billion), representing 36.8 per cent of the total.
Analysis of the report revealed that the banking sector received the highest foreign inflows in the review period of $1 billion, accounting for 36 per cent of the total inflows while shares followed closely with $901.3 million representing 32.4 per cent of the aggregate recorded.