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Economy & Politics

Abuja overtakes Lagos as top destination for Capital Importation

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Abuja overtakes Lagos as top destination for Capital Importation

The report shows a fourth successive quarterly growth in Capital Importation into Nigeria, since the second quarter of 2017 (Q2 2017).

The sum of $6,303.63 million was the value of total capital imported into Nigeria during the period which shows a 17.11% growth from the last quarter – Q4 2017 – with a year on year increase of 594.03%.

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  • Foreign Portfolio Investment (FPI) which grew from $3,477.53 million in Q4 2017 to $4,565.09 million in Q1 2018 was the major reason for the increase in Nigeria’s capital inflow.
  • FPI alone accounted for 72.42% of the total Capital Importation into Nigeria during the quarter under review.
  • FPI has been growing faster than the other types of Capital Importation since Q2 2017 remaining the largest contributor with 35% in Q1 2018.
  • It stood at $4,565.1 million with a growth of 31.27% from the last quarter of 2017.

[READ MORE: Nigeria’s Foreign Portfolio Investment Vs Foreign Direct Investment]

Foreign Direct Investment (FDI) contributed 3.91% while Other Investment accounted for 23.67% of total Capital Importation.

  • FDI’s still pale in comparison to Portfolio Investment and it reduced by 83% to $246.62 million in Q1 2018 to represent only 3.9% of the total capital imported.
  • However, increase in Money Market Instruments with a value of $3,527.60 million was the main reason for the thick growth recorded by Portfolio Investment in the first quarter of 2018, with a lion share of 77.27% out of the total Portfolio Investments.
  • Though Other Investments stood at $1.49 billion in Q1 2018 to reduce by 2.29% from the last quarter of 2017, it nevertheless grew by 289.25% when compared to the same quarter in 2017.
  • It contributed 23.67% to Capital Importation into Nigeria in Q1 2018. Loans with a figure of $1,27 billion have a contribution of 85.02% of Other Investments.

Equities dominate

During the quarter, Capital Importation into Nigeria was dominated by shares.

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  • Capital inflow in the form of Shares grew by 3.05% to $3.79 billion from $3.68 billion reported in the previous quarter while the percentage share of equities to total Capital Imported reduced from 68.37% in Q4 2017 to 60.17% in Q1 2018.
  • However, the leading sector for foreign capital inflow still remained Banking, with 18.7% of the total Capital Importation in the first quarter of 2018 in a value of $1.18 billion.
  • Financing stood at $485.41 million as the second leading sector followed by Production, Servicing and Telecoms sectors in that order.

[READ MORE: Nigeria receives $17.5 billion diaspora remittances in 2019]

Abuja takes over

  • Meanwhile, Abuja, which overtook Lagos in the previous quarter attracted $3.54 billion to remain the highest state that received foreign Capital Inflow during the period, with a growth of 32.24% from Q4 2017.
  • Lagos stood in the second position with a marginal growth of 4.59% from $2.55 billion in the last quarter to $2.67 billion in the period under review while Akwa Ibom was third with $43.62 million Capital Imports.

Capital Importation by Countries

  • United Kingdom is still the number one nation in terms of Capital Investment in Nigeria with $2.25 billion which accounted for 35.73% of the total capital inflow in Q1,2018.
  • The UK increased her Capital Investments in Nigeria by 39.89% from the last quarter.
  • The United States was second with $1.26 billion accounting for 19.99% of the total Capital Imports. South Africa and Ghana were third and fourth with $493.22 million and $380.14 million capital inflows respectively.
  • That of South Africa in particular increased by 79.29% from Q4 2017.

Leading Banks

  • Lastly, Standard Chartered Bank was the bank through which the highest share of Foreign Capital flowed in the quarter under review, with 25.49% of the total capital inflow.
  • It was followed by Access Bank, Ecobank, Zenith Bank, Stanbic IBTC Bank and Guaranty Trust Bank in that order.
  • The six banks jointly accounted for 81.90% of the total capital Imported into Nigeria in Q1 2018.

[READ MORE: Nigeria received $5.82 billion capital inflows in Q2 2019, down by -31.41%]

Why it matters

The huge increase in the inflow of Capital Imports into Nigeria, especially Portfolio Investment, is typically a positive development for will the Nigerian Capital Market.

  • Higher FPI creates the liquidity that can sustain market growth, particularly for stocks. Investments in the capital markets also reflect the spate of equity investments that have taken place in the Nigerian Economy over the last 6 months.
  • Improving capital importation translates to higher external reserves. Nigeria’s external reserves are close to $48 billion and have helped stabilize the exchange rate.
  • Improving FDI is mostly sought after as it reflects investor confidence in investing in development areas of the country. FDIs have always been lower than FPIs.
  • The downside risk with FPIs inflows is that a threat to the economy typically results in its immediate outflows. This is why it is often referred to as hot money.

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COVID-19 palliative: Sanwo-Olu concludes Homegrown School Feeding Programme

The homegrown school feeding programme, was targeted at providing food packages for 37,589 households of pupils in Public Primary Schools years 1-3

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Sanwo-Olu, COVID-19: Lagos ramps up measure to smash disease as it begins fumigation, Covid-19: Total lockdowm imminent as Lagos fears confirmed cases could hit 39,000, Hotels to remain shut in Lagos, as manufacturing and construction companies get conditional waivers, COVID-19 palliative: Sanwo-Olu concludes Homegrown School Feeding Programme

The modified homegrown school feeding programme, launched on May 21, as part of palliatives offered by the Lagos state government to cushion the economic impact of the COVID-19 pandemic, has been concluded.

The programme, which basically modified the already existing school feeding programme, was targeted at providing food packages for 37,589 households of pupils in Public Primary Schools years 1-3.

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According to an official tweet from the Lagos state government, the programme was concluded on Tuesday, June 2, 2020.

The Executive Chairman of Lagos State Universal Basic Education Board, LASUBEB, Mr. Wahab Alawiye-King, noted that the distribution of the packages to the beneficiary households took off on May 21, and was spread across 202 centres across the 20 Local Government Education Authorities in the State.

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(READ MORE:COVID-19: Lagos receives N200 Million, 5 ambulances from BUA Foundation)

Items contained in the Take-home rations:

Each beneficiary of the packages received a take-home ration made up of “5kg Bag of Rice; 5kg Bag of Beans; 500 ml Vegetable Oil; 750ml Palm Oil; 500mg Salt; 15 pieces of eggs and 140gm Tomato Paste,” which is expected to assist the parents and guardians feed the children as they remain at home during the prolonged holiday.

What you should know:

The Federal government also introduced a modified homegrown school feeding programme on May 15 to be coordinated by the Honourable Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Farouq.

Farouq noted during one of the Presidential Task Force media briefings that the distribution of Take-Home Rations (THR) to the households of the children on the programme as a feasible method, after exploring several options of reaching children in vulnerable households.

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Each Take-Home Ration is said to be worth N4,200, although the Minister has not released full details of the programme.

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According to the World Food programme, there are 17 countries currently distributing Take-Home rations to school children. In Liberia, Take Home Rations have been distributed since 2019.

 

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Economy & Politics

Buhari meets with AfDB President, Akinwumi Adesina, promises support

Nigeria stands solidly behind Akinwumi Adesina in his re-election bid as the President of the African Development Bank (AfDB).

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President Muhammadu Buhari on Tuesday, June 2, 2020, met with the President of the African Development Bank (AfDB), Akinwumi Adesina, at the presidential villa.

The meeting will not be unconnected with the current travails of Adesina, who was accused by a group of whistleblowers for official misconduct and the pressure by the United States Government for an independent probe of all allegations.

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This was disclosed in a tweet posted on the president’s official Twitter handle.

The meeting which lasted for about 45 minutes was also attended by the Minister of Finance, Budget and National Planning, Zainab Ahmed; Minister of Foreign Affairs, Geoffrey Onyeama, and the Chief of Staff to the President Ibrahim Gambari.

The President in his statement said, ‘’Nigeria stands solidly behind Akinwumi Adesina in his re-election bid as the President of the African Development Bank (AfDB). We will work with all leaders and stakeholders in AfDB to ensure that he re-elected on the strength of his achievements during this term.

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‘’In 2015, when you were to be elected for the first term, I wrote to all African leaders, recommending you for the position, I didn’t say because you were a PDP Minister, and I belonged to the APC, so I would withhold my support.’’

Adesina has continued to deny the allegations and maintain his innocence.

I maintain my innocence with regard to trumped-up allegations that unjustly seek to impugn my honour and integrity, as well as the reputation of the African Development Bank,” Adesina said recently while responding to the accusations.

The Federal Government has, however, continued to rally support for Adesina as the Minister of Finance, Budget and National Planning, Zainab Ahmed in a letter urged the board of the AfDB to ignore calls for an independent investigation of Mr Adesina.

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Nigeria’s Former President Olusegun Obasanjo had earlier in his statement, and as a show of support, called on the board of AfDB to ignore calls for an independent investigation of Adesina by the US treasury secretary.

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Economy & Politics

Lagos commends religious leaders in the state, churches and mosques to remain closed

The Lagos State Government has commended religious leaders in the state for their cooperation and active participation in the ongoing fight against the COVID-19 pandemic

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Prince Anofiu Elegushi

The Lagos State Government has commended religious leaders in the state for their cooperation and active participation in the ongoing fight against the COVID-19 pandemic, saying that the cooperation received from the leaders of the two major religious groups, especially in the area of zero-congregational gathering, assisted in lowering the curve of the pandemic.

The commendation was given on Tuesday, June 2, 2020, by the state’s Commissioner for Home Affairs, Prince Anofiu Elegushi, during a Ministerial Press briefing commemorating the first year in office of Mr Babajide Sanwo-Olu at Alausa, Ikeja.

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On plans to reopen the economy of the State including worship centres, Elegushi pleaded for continued collaboration with the State government and adherence to the government’s directives that would still be presented to the various churches and mosques when they are eventually allowed to gather for their services.

According to Elegushi, “When we got a hint on the current Coronavirus disease across the globe, we immediately went into action by organising a sensitisation and briefing workshop on Tuesday, March 3rd, 2020 at the Chapel of Christ the Light Hall, Alausa. This was followed by another meeting where a joint decision was reached by all religious bodies to reduce the attendance of worshippers to 50 worshipers at a time”.

In addition to this, our Religious Leaders came together again on 18th March 2020 after reviewing the situation to agree on a total lockdown of Religious Worship Centres across the State before President Muhammad Buhari came up with an announcement locking down Lagos, Ogun and Abuja“, he said.

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Elegushi said that the shutdown of all religious gatherings, activities and programmes by churches and mosques was quite timely and helped in the containment of the virus from escalating beyond control, considering the huge numbers that do gather periodically for religious purposes in the State.

He also acknowledged the discomfort which the pandemic brought on both the Muslims and Christians in Lagos, specifically during the Lenten season and the Ramadan period.

He said: “For a very long time in human history, Christians celebrated the Lenten period and Easter celebrations at home, while our Muslim brothers and sisters were also restricted to observe Sallah at home throughout the Ramadan period, including the Eid-El Fitri celebrations”.

Elegushi attributed the mutual understanding that exists between the State government and the religious groups to a long-term religious harmony and peaceful coexistence, saying that creating rapport is one of the critical functions of the Ministry.

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Meanwhile, information from a monitored report suggests that the churches and mosques in the state might not be opening anytime soon for worshippers. This was disclosed by Elegushi on the sideline of the Ministerial briefing commemorating the first year in office of Governor Babjide Sanwo-Olu.

Patricia

He said that the reopening was not possible as Lagos State is the epicentre of the coronavirus pandemic in the country and that after several meetings with religious leaders in the state, the possibility of reopening religious houses was ruled out.

Elegushi said that they claim that they cannot take responsibility for ensuring that only 20 or 50 people are in attendance.

He said that the governor will come out with further directives.

It can be recalled that the Federal Government, on Monday, June 1, 2020, announced the relaxation of the ban on religious gatherings. They, however, said that each state government can devise measures that suit them, thereby looking at the possibility of doing so in their respective states.

 

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