Nigeria received $5.36 billion capital importation (inflows) in the third quarter (Q3) of 2019, compared to $5.82 billion in the second quarter (Q2). This is the lowest amount of capital importation received in the year.
According to the latest capital importation report released by the National Bureau of Statistics (NBS), $5.36 billion capital importation received in the third quarter represents a -7.78% contraction from the total amount ($5.82 billion) received within the second quarter (Q2). Meanwhile, year-on-year, capita inflows rose by 87.99%.
Capital Inflows by Type
Nigeria’s capital importation is categorized into three investment types, and these include Portfolio Investment, Foreign Direct Investment (FDI) and Other Investment.
In Q3 2019, the largest amount of capital importation by type was received through portfolio investment, which accounted for 55.88% ($2.99 billion) of total capital importation, followed by Other Investment, 40.39% ($2.16 billion) of total capital, and then Foreign Direct Investment, which accounted for 3.73% ($200.08 million ) of total inflows within the period.
Foreign Direct Investment (FDI): FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. In the latest report, FDI constituted only 3.73% ($200.08 million) of total capital inflows in Q3 2019, this represents the lowest across all forms of capital inflows in the country. The breakdown of FDI shows that investment in equity amounted to $196.38 million, while other capital stood at $3.70 million.
The Portfolio Investment: During the period under review, the largest amount of capital importation by type was received through portfolio investment, which accounted for 55.88% ($2.99 billion) of total capital importation in Nigeria.
Under the portfolio category, investment in money market instruments remains the largest recipient of capital inflows with a total of $2.54 billion, followed by $196.36 million in equity, while investment in bonds stood at $91.60 million.
Other Investment: According to the NBS report, other investment is broken down into four categories which include Trade credits, Loans, Currency deposits and other claims. However, the bureau only provided details for loans and other claims. In the third quarter of 2019, other investments recorded the second-largest capital importation, accounting for 40.39% ($2.16 billion) of total capital importation.
Capital inflows by Sectors
Further analysis of the capital importation shows that ten major sectors of the sixteen sectors recorded a decline in capital importation. The sectors (nature of business) that witnessed major decline within the quarter include Shares, Agriculture, Banking, Brewing, Construction, Consultancy, Financing, Fishing, Hotels, Production, Servicing and Transport.
On the positive side, major sectors that recorded growth in capital inflows within the quarter include consultancy, electrical, marketing, oil and gas, telecoms and transport.
In aggregate, the top five sectors with the biggest capital inflows received within the quarter are Banking ($1.75 billion), Financing ($1.47 billion), Telecoms ($884.85 million), Shares ($774.69 million) and production ($153.77 million).
Capital inflows by origin
The United Kingdom remains the biggest source of capital investment in Nigeria. In Q3 2019, investment from the U.K amounted to $2.01 billion (37.4%) down from $3.13 billion received in Q2 2019 and $4.53 billion in Q1. This accounted for 53.40% of the total capital inflow in Q3 2019.
The top five countries that accounted for the biggest capital inflows in Nigeria within the quarter include U.K ($2.01 billion), U.S ($1.23 billion), South Africa ($$708.77 million), Egypt ($251.1 billion) and Netherlands ($161.12 million).
What this means for the Nigerian economy
- The decline in capital importation in Q3 2019 means the amount of foreign capital that investors brought into the Nigerian economy between July and September 2019 dropped when compared to the amount in Q2 2019 (April and June).
- Meanwhile, this does not necessarily imply a negative trend in the economy, due to the fact the on a year-on-year basis, capital importation into the economy improved significantly by 87.99%.
- This is further strengthened by the latest GDP data, which shows that the economy grew by 2.28% in real terms, in the third quarter of 2019, up from 1.81% growth recorded in the third quarter of 2018.
- As earlier published on Nairametrics, expectations are high for the Nigerian economy as the World Bank’s 2.1% annual growth forecast for 2019 may eventually be surpassed.
- However, the latest capital importation report shows a worrying trend.
- For instance, the inflow of FDI into the economy dropped further, and this is not good for the economy. In Nigeria, FDI remains abysmally low.
- Analysts have stated that the low inflow of FDI is not good for the economy as other forms of capital importation has very low potential to drive the economy as FDI does.
Applications across Nigeria, South Africa and Kenya now open for the 2021 Facebook Community Accelerator Program
The selected leaders will spend five months learning from experts, coaches and a customised curriculum so they can strengthen their community.
Today, Facebook is inviting community leaders from Nigeria, South Africa and Kenya to apply for the 2021 Facebook Community Accelerator Program—a program that offers participants training, mentorship and up to $50,000 USD in funds to invest in an initiative that extends their community’s positive impact.
The aim of the Community Accelerator is to help leaders of Facebook communities to harness the power of their community to turn ideas into action. The selected leaders will spend five months learning from experts, coaches and a customised curriculum so they can strengthen their community.
Lessons include community identity foundations, leading action-oriented programmes and sustainability. Participants will also receive early access to new Facebook products aimed at helping communities better manage and activate their members.
Plan an initiative
Participants will identify an important initiative that will create a positive impact on the broader world and develop a plan to mobilise their community around their goal. Initiatives will be shared with potential partners, mentors and a panel of judges for the chance to be awarded funding and receive public recognition.
Participants will then spend three months executing their initiatives. They will collaborate with advocates and leaders in the community space and work with the Facebook team to bring their ideas to life.
Says Kiran Yoliswa, Partner Management Lead, Middle East and Africa Community Partnerships at Facebook: “Facebook communities and their leaders are helping to resolve social challenges, sharing knowledge and information, while connecting with others that share their interests or passion for a cause. We’ve seen so many incredible communities from across South Africa, Kenya and Nigeria using our platform to drive change and provide support and encouragement for thousands of people, we’re excited to offer their Facebook Community leaders this program to help amplify their impact even more.”
How to apply
This program is open to communities that have a presence in Facebook Groups with leaders who are 18 years or older. Communities must have existed for over one year and must have a minimum size of 1,000 members. Applications open today, May 4 – 31, 2021.
The Community Accelerator is part of our Facebook Community Leadership Program, a global initiative that invests in people building communities. Learn more and apply here.
NIN registration: 54 million Nigerians have now enrolled – Buhari
12 million Nigerians were enrolled into the National Identity Database in the past 6 months.
President Muhammadu Buhari disclosed that the FG has enrolled 54 million Nigerians into the National Identity Database, citing that 12 million were enrolled in the past 6 months alone and that the final aim of the scheme is to secure Nigeria’s security infrastructure.
President Buhari disclosed this in a statement on Thursday evening.
What the President said about NIN enrollment
“I am pleased with the success we are recording in the enrollment of persons into the National Identification Number (NIN) database. 54 million Nigerians have now enrolled; I am told over 12 million of these within the last six months. Our goal is total coverage.
The National Identification Number (NIN) is the foundational digital ID for the country. It will cover one of the weaknesses in our security structure. We will be able to easily identify all Nigerians, including the crooks in our midst.”
The President added that both legal residents and Nigerians are expected to obtain the NIN as it would be beneficial to government agencies to utilise resources efficiently.
In case you missed it
The Federal Government announced a further extension of the ongoing National Identification Number (NIN) registration and linkage with Subscriber Identity Module (SIM) exercises to a new deadline of June 30, 2021.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- 2021 Q1 Results: FTN Cocoa Processor Plc reports loss after tax of N162.21 million
- Tantalizers Plc reports a loss after tax of N97.75 million in FY 2020 in Q1 2021.
- Courteville Business Solutions Plc proposes final dividend of 3 kobo per share for FY 2020.
- 2020 FY Results: UPDC Real Estate Investment Trust records over 500% growth in Profit after tax.
- Sovereign Trust Insurance records a 43% surge in profit after tax to N392.1 million in Q1 2021.