Nigeria Records 41.3% Capital Importation Drop In Q1

Latest data from the National Bureau of Statistics (NBS), on Thursday showed that capital importation dropped to $908.27m in the first quarter of 2017, representing a 41.36% decrease from the level in the previous quarter (2016 Q4).
The figure, the second lowest value recorded since 2007, though up by 27.75% relative to the corresponding period of 2016, was particularly impacted by the low $187.9m capital imported in January, making it the fourth month since 2007 in which the figure was lower than $200m.
The bureau, in the report titled: “Nigerian Capital Importation- Q1 2017,” however noted that within the review period, there was “high-profile sale of (bonds denoted in a non-local currency) during the quarter, but this has not yet appeared in the data; there is a lag between subscription and actual payment, and therefore it is possible that this will show up next quarter.
“The main driver of the quarterly decline was a fall in Other Investment, although Foreign Direct Investment (FDI) also contributed. Portfolio investment was the only category to record an increase relative to the previous quarter.”
Although the fall in FDI follows four consecutive quarters of increase, while the fall in Other Investment follows three consecutive quarters of increase, the report noted that the data is volatile, notwithstanding following which the decline seen in Q1 may not be sustained.
Nearly all the quarterly fall resulted from declines in capital imported into the telecommunications, as well as the oil and gas sectors, which recorded unusually high values in the previous quarter.
Other investment, which stood at $383.28m or 42.2% of total, was the largest component of imported capital in the review period, despite the large quarterly fall of 58.34%, as against $920.03m recorded in 2016 Q4.
Loans continues to dominate the other investment segment, accounting for 96.35%
Portfolio Investment was the second largest component of capital importation in the period, accounting for $313.61m, or 34.53% of the total, representing a growth of 10.34% relative to the previous quarter, and 15.71% relative to the same quarter of 2016.
“This was the only category to record both year on year and quarterly increases, and it was the first year on year increase since the third quarter of 2014. This was possibly related to recent successes in stabilizing the Naira: during the quarter the Naira halted its continual decline, although it remains to be seen if this lasts.
“Portfolio investment is likely to be more affected than this than other investment types, due to its short-term nature.”
During the review period also, the NBS noted a significant change in the composition of Portfolio Investment, with portfolio equity, usually the largest component declining from $176.44m in the previous quarter to $101.99m, representing a 42.19%.
In contrast, Money Market Instruments increased from $82.37m to $211.61m, an increase of 156.90%, making it the largest component, as it accounted for 67.48% of Portfolio Investment, compared to 32.52% for Portfolio Equity. No capital was imported in the form of bonds.
At $211.38m or 23.27% of the total in the period, FDI remained the smallest component of capital importation in the first quarter of 2017, just as has been the case since 2013. It represented a quarterly decline of 38.66%, but a year on year increase of 21.17%.

Sign In

Register

Reset Password

Please enter your username or email address, you will receive a link to create a new password via email.