Nigeria saw a significant increase in total capital importation, which rose by 210.16% in the first quarter of 2024, reaching $3.37 billion compared to $1.08 billion in the previous quarter of 2023.
The National Bureau of Statistics (NBS) revealed these findings in its capital importation report for the first quarter of 2024.
When compared to the corresponding quarter of 2023, capital importation increased by 198.06% in the first quarter of 2024.
Capital imports by type and sector
In Q1 2024, portfolio investment led with $2.07 billion, accounting for 61.48% of the total, followed by Other Investments at $1.18 billion (34.99%). Foreign Direct Investment was the smallest, with $119.18 million (3.53%) of the total capital importation.
The Banking sector received the highest inflow, totaling $2.06 billion, which constituted 61.24% of the total capital imports. This was followed by the Trading sector at $494.93 million, representing 14.66% of capital imports, and the Production/Manufacturing sector at $191.92 million, making up 5.68% of capital imports in the country.
Notably, Stanbic IBTC recorded around $399 million in capital import inflow in Q1 2024, surpassing its full-year total in 2023 at $384 million.
Capital imports by origin and state destination
In the reference period, the majority of capital importation into Nigeria came from the United Kingdom, totaling $1.81 billion, which represented 53.49% of the total. This was followed by the Republic of South Africa with $580 million (17.25%) and the Cayman Islands with $190 million (5.52%).
Lagos State was the top destination for capital importation during the quarter, receiving $2.78 billion, which accounted for 82.42% of the total. Abuja (FCT) followed with $590 million (17.58%), and Ekiti State with $0.01 million.
Only three out of the 36 states and FCT recorded capital imports during the period, with around 34 states recording zero capital imports in the first quarter of the year.
Stanbic IBTC Bank Plc received the highest capital importation into Nigeria in Q1 2024 with $1.26 billion (37.24%), followed by Citibank Nigeria Limited with $0.55 billion (16.22%) and Rand Merchant Bank Plc with $530 million (15.66%).
During the quarter, there was a more than 200% increase in capital imports, particularly in portfolio investment.
This sharp increase was influenced by the Central Bank of Nigeria’s 600 basis points hike in the Monetary Policy Rate (MPR) and the attractive returns offered by Federal Government of Nigeria (FGN) bonds and CBN Treasury bills.
In the first quarter, investors showed an avid interest in FGN and CBN securities due to their high returns.
However, there was a minimal inflow of foreign capital into the real economy through foreign direct investment, reflecting concerns from real economy participants about the CBN’s interest rate hike potentially diverting capital from the real economy to the financial sector.
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