Foreign direct investment, according to the Central Bank of Nigeria (CBN’s) latest report, declined by 33.3 percent which amounted to $30m in January.
The CBN’s January report on capital importation and capital outflow claimed that the FDI at $90m in December fell to $60m in January.
The report read in part: “Estimated data revealed a reduction in capital importation during the review period, reflecting the tight global financial conditions and narrowing interest rate differentials, occasioned by low yields on domestic money market instruments.
“A total of $0.38bn new capital was imported into the economy in January 2021, compared with $0.55bn in December 2020.
“A disaggregation of capital importation by type of investment showed that inflow of Other Investments accounted for the largest share at $0.29bn, and represented 75.5 per cent of the total, followed by FDI inflow of $0.06bn, which accounted for 16.4 per cent.
“Foreign Portfolio Investment inflow, at $0.01bn, constituted 8.1 per cent of the total. When compared with the $0.44bn, $0.09bn and $0.02bn for OI FDI and FPI, respectively, in the previous period, it indicated a decline of 34.1 per cent, 33.3 per cent and 50.0 per cent, respectively.”
The report read further that in terms of capital importation by nature of investment, banking accounted for 39.6 per cent; shares, 31.5 per cent; production/manufacturing, 12.8 per cent; telecommunication, 6.1 per cent; financing, six per cent; and agriculture, four per cent.
Other sectors accounted for the balance. A breakdown of capital importation by originating country showed that the United Kingdom, The Netherlands, Republic of South Africa, United Arab Emirates, Singapore, Denmark and Hong Kong accounted for 46.8 per cent, 20.1 per cent, 7.9 per cent, 6.5 per cent, 4.2 per cent, 3.2 per cent and 3.1 per cent, respectively, of the total inflow.
By destination of capital, the report added that Lagos State, Abuja and Ogun State were the top recipients of the inflow at $0.18bn (75.6 per cent), $0.08bn (24.1 per cent), and $0.006bn (0.2 per cent) respectively.
The report added that the capital outflow decreased significantly by 83.6 per cent (month-on-month) to $0.11bn in January 2021, relative to $0.67bn in December 2020.
ALso, the disaggregation showed that outflow in the form of loans at $0.09bn accounted for 83.8 per cent, while capital reversal worth $0.01bn accounted for 12.7 per cent of the total.