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UPDATED: Nigeria received $5.85 billion capital inflows in Q1 2020 –NBS

Nigeria received $5.85 billion capital importation (inflows) in the first quarter (Q1) of 2020, compared to $8.51 billion in Q1 2019.

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Nigeria received $5.85 billion capital importation (inflows) in the first quarter (Q1) of 2020, as against $8.51 billion in Q1 2019. This is according to the latest capital importation report released by the National Bureau of Statistics (NBS).

According to the NBS, the $5.85 billion worth of capital importation in Q1 2020 represents an increase of 53.97% when compared to how much was received in Q4 2019.

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However, when compared to the corresponding first quarter period of 2019, the figure indicates a 31.19% decline.

READ ALSO: Nestle releases Q1 2020 result, administrative and distribution expenses drive down profits

Capital Inflow by type

In the first quarter of 2020, the largest amount of capital importation was received through portfolio investment, which accounted for 73.61% ($4.31 billion) of the total capital importation.

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Under the portfolio category, investment in money market instruments remains the largest recipient of capital inflows with a total of $3.44 billion, followed by $639.72 million in equity, while investment in bonds stood at $231.22 million.

Foreign Direct Investment (FDI): FDI constituted only 3.66% ($214.25 million) to the total capital inflows. A decline of 16.72% compared to $257.25 million received in Q4 2019 and 13.39% reduction compared to the corresponding quarter of 2019.

READ ALSO: Hike in VAT rate buoys VAT Revenue in Q1 2020

FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country.

Other Investments: other investments, which was broken down into four categories contributed 22.73% ($1.33 billion) to the total capital importation in the first quarter of 2020. The inflows through other investments reduced by 19.92% when compared to $1.66 billion received in Q4 2019.

Investment through trade credits in the first quarter of 2020 was $50,000, Loans ($559.79 million), Currency deposits ($820,000) while other claims scooped the highest share of $769.99 million.

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READ MORE: Full text of President Muhammadu Buhari’s Letter to Nigerians

Capital inflows by Sectors

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A further look into the report shows that the banking sector received the largest portion of capital importation as it constituted 51.08% ($2.99 billion) to the total capital inflows, followed by Financing, which received $1.33 billion (22.77%) in Q1 2020.

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Shares followed with $817.38 billion (13.96%), Production $273.97 billion (4.68%) while Telecoms received $157.48 billion (2.69%).

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Capital inflows by origin

The United Kingdom remains the biggest source of capital investment in Nigeria. In Q1 2020, investment from the U.K amounted to $2.91 billion, up from $1.19 billion received in Q4 2019 and decline compared to $4.48 billion in Q1 2019.

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The top five countries that accounted for the biggest capital inflows in Nigeria within the quarter include U.K ($2.91 billion), South Africa ($692.63 million), UAE ($532.89 million), Netherlands (441.79 million), and U.S ($389.1 million).

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Economy & Politics

INEC to introduce election results viewing portal

INEC says the policy would be tested at the Nasarawa State Constituency Bye-Election.

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INEC headquarters gutted by fire

The Independent National Electoral Commission, INEC, has announced the introduction of a dedicated public portal called the INEC Result Viewing (IreV), which would enable Nigerians to view real-time results in polling stations.

This was announced Thursday evening in a statement signed by Festus Okoye, INEC’s Commissioner and Chairman of Information and Voter Education Committee.

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“ The Commission is aware that result management has remained a major source of mistrust in our electoral process. INEC is determined to address any source of this concern through enhancing the level of transparency in the conduct of elections,” INEC said.

INEC also said that it is an important principle for votes during elections to be correctly counted. This new initiative is a major step towards achieving that goal. However, INEC said this does not constitute electronic collation of votes just yet. Instead, “the collation of election results shall remain as provided for by law, a manual process of completion.”

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IreV would be tested during the Nasarawa State Constituency Bye-Election scheduled for August 8th, INEC said.

Concerned Nigerians are advised to visit inecresults.com, create an account, and fill in their details which will lead them to the portal to oversee the collation of votes.

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Financial Services

FBN Holdings announces N25 billion capital injection into FirstBank

The fresh equity capital injection is coming on the heels of FBN Holdings’ recent divestment from FBN Insurance.

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N25 billion worth of equity capital has been injected into First Bank of Nigeria Limited by its parent company, FBN Holdings Plc. The move is coming on the heels of FBN Holdings’ recent divestment from FBN Insurance Ltd.

A statement signed by FBN Holdings’ Company Secretary, Seye Kosoko, as seen on the Nigerian Stock Exchange’s website, noted that the N25 billion is part of the net proceeds from the recent divestment from  FBN Insurance Limited.

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READ MORE: Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020

Following this N25 billion capital injection, First Bank of Nigeria Limited’s Capital Adequacy Ratio (CAR) has increased to 16.53%. This is before capitalising year to date profit for half-year 2020.

More details: While commenting on this development, FBN Holdings’ Chief Financial Officer, Oyewale Ariyibi, said that the “divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core baning business for which the Group is renowned.”

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The company also explained that the overriding objective of these recent moves is to “optimise capital across the Group to drive business growth, enhance efficiency, and improve overall shareholders’ value.”

READ MORE: More banks, insurance firms declare closed periods ahead of H1 results release

The backstory: Back in April this year, FBN Holdings Plc first disclosed ongoing talks with Sanlam Emerging Markets (Proprietary) Ltd over a possible sell-off of its 65% stake in FBN Insurance to the South African firm. Fast-forward to early June, FBN Holdings again informed stakeholders that it had completed the divestment process. All the while, no mention was made about the value of the transaction until now.

Note that FBN Holdings Plc reported a profit after tax of N49.5 billion for the half-year period ended June 30th, 2020. This represents a 56.3% increase when compared with N31.6 billion reported in H1 2019. The company’s Chief Executive Officer, UK Eke, recently commented on performance, noting that “the H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value.”

READ MORE: Here’s how much banks spent on advertising & marketing in Q1 2020

FBN Holdings’ share price on the Nigerian Stock Exchange is currently trading at N5.05. The company has a market capitalisation of about N181.3 billion, according to information gleaned from Bloomberg.

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Hospitality & Travel

UAE denies placing travel ban on Nigerians, gives reason for suspending visa issuance

The travel between Nigeria and UAE remained limited due to the closure of the Nigerian airspace.

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UAE denies placing travel ban on Nigerians, gives reason for suspending visa issuance

The United Arab Emirates (UAE) Embassy in Nigeria has reacted to media reports about the purported travel restrictions imposed on Nigerians wishing to travel to the UAE.

In its response, the UAE Embassy in Abuja refuted the accuracy of the information which was contained in those reports, while also affirming the growing bilateral relations between the 2 friendly countries.

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This disclosure was made in an official statement by the United Arab Emirates Embassy in Abuja on Thursday, August 6, 2020.

The embassy, in its statement, said the UAE government acknowledged that travel between Nigeria and the UAE has been limited due to the closure of the Nigerian airspace. Part of the statement said:

In response to recent press and social media reports regarding purported travel restrictions between the UAE and Nigeria, and in an affirmation of the growing bilateral relations between the two friendly countries, the UAE Embassy in Abuja denies the accuracy of the information contained in these reports.

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“At the onset of the COVlD-19 pandemic, the UAE took a number of precautionary measures to combat the virus’ spread, including the temporary suspension on issuing UAE visas for all nationalities as of March 17, 2020.

“After entering the recovery phase of the pandemic, the UAE eased some measures on July 7, permitting visitors from various countries to adhere to the necessary precautionary measures, including by showing negative PCR test results within 92 hours of travelling to the UAE. This includes those visiting from Nigeria.”

(READ MORE:FG travel restrictions on 13 countries: A little too late?)

The statement also noted that the UAE Embassy and the Nigerian Government will continue to work closely to obtain the necessary approvals to facilitate travel between both countries.

It can be recalled that there were media reports which were triggered by claims of a travel agency, saying that visa renewals for Nigerians in the UAE, approval for permanent residents, and tourist visas have been discontinued.

Some social media users, in reaction to the development, linked the new restrictions to some of the fraud cases involving some Nigerians in Dubai recently

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