Capital importation declines to $5.5bn ìn Q2 ― NBS

NBS

THE total value of capital importation into Nigeria stood at $5,513.55 million in the second quarter of 2018.

“This was a decrease of 12.5per cent compared to Q1 2018, but a 207.62 per cent increase compared to the second quarter of 2017”, according to National Bureau of Statistics (NBS) ìn a report released on Tuesday.

The decline recorded in the second quarter was as a result of a decline in the portfolio and other investments, which declined by 9.76 percent and 24.07 percent respectively.

The largest amount of capital importation by type was received through portfolio investment, which accounted for 74.7 percent ($4,119.5m) of total capital importation, followed by other investment, which accounted for 20.5 percent ($1,132.8m) of total capital, and then foreign direct investment FDI, which accounted for 4.7 percent ($261.4m) of total capital imported in the second quarter.

Capital Importation can be divided into three main investment types: Foreign Direct Investment (FDI), Portfolio Investment and Other Investments, each comprising various sub-categories.

Since 2017 Q2, portfolio investment has been expanding faster than the other two categories.

Although the absolute value of portfolio investment declined in Q2 on a quarterly basis, falling from $4,565.09 million in Q1, 2018 to $4,119.46 million in Q2, 2018, it remained the largest component of the total capital importation in the quarter under review, followed by other investments, and then FDI.

In the second quarter of 2018, total foreign direct investment stood at $261.35m, growing by 5.97 percent from the first quarter of the same year, but falling by 4.75% when compared to the corresponding quarter of last year.

FDI represented only 5 percent of the total capital import.

Equity investment dominated FDI in the second quarter, accounting for 97.85 percent of total FDI received in the second quarter.

Capital Importation in the form of other capital saw significant expansion, from only $5,000 as recorded in Q1 to $5.63 million in Q2, an increase of over 1000 percent compared to the same period of last year.

Portfolio investment remained the most significant component of total capital inflow into Nigeria in the second quarter of 2018, although it contracted by 9.76 percent over the previous quarter.

The total value of portfolio investment in Q2 recorded was $4,119.46 million, which was a 434.64 percent growth compared to Q2, 2017 ($770.51 million).

The 9.76 percent Q-on-Q decrease was due to a fall in the largest sub-component– money market Instruments.

Capital importation in the form of money market instrument stood at $2,670.93 million in the second quarter, which was a 24.29 percent decrease over the previous quarter.

Investments in both equity and bonds (under Portfolio Investments) reported steady quarter-on-quarter growth, with 49.43 percent and 19.13 percent respectively.

It is worth noting that investments in bonds under this capital importation type has been steadily increasing since Q2, 2017, and in Q2 2018 , it accounted for 9.71 percent of total portfolio investment.