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UPDATED: Nigeria received $1.29 billion capital inflows in Q2 2020, down by 78.6%

The United Kingdom emerged as the top source of capital investment to Nigeria in Q2 2020.

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Nigeria received $1.29 billion capital inflows in Q2 2020, down by 78.6%, IMF, Nigerian Manufacturers confirm dollar scarcity, Donald Trump, U.S dollar gains strength, triggered by doubts over COVID-19 vaccine

Nigeria received $1.29 billion capital importation (inflows) in the second quarter (Q2) of 2020, representing a decrease of 78.6% compared to the corresponding quarter of 2019. This is according to the latest Nigerian Capital Importation report released by the National Bureau of Statistics (NBS).

According to the report, $1.29 billion represents the lowest inflows recorded since Q1 2017 when capital inflow of $908.3 million was recorded.

Also, the latest figure indicates a decrease of 78.6% compared to $6.05 billion received in the corresponding quarter of 2019 and 77.9% decrease compared to $5.85 billion in Q1 2020.

READ: UPDATED: Nigeria’s GDP contracts by 6.10% in Q2 2020, as critical sectors plunge

 

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Capital Inflow by type

The largest amount of capital importation by type in Q2 2020 was received through other investments, which accounted for 58.77% ($761.03 million) of total capital imported during the quarter. Inflows from other investments, declined by 42.8% as against $1.33 billion received in the previous quarter and a further 48.6% reduction compared to $1.48 billion recorded in the corresponding quarter of 2019.

Portfolio investment followed with $385.32 million, accounting for 29.8% of the total inflows in Q2 2020. Under the portfolio category only Equity ($52.3 million) and money market instruments ($332.1 million) received inflows during the quarter under review.

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Foreign Direct Investment (FDI): FDI accounted for only 11.47% ($148.6 million) to the total capital inflows. A decline of 30.6% compared to $214.3 million received in Q1 2020 and 33.41% reduction compared to the corresponding quarter of 2019.

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 Q2 2020, FDI came into Nigeria only through equities.

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

 

Capital inflows by Sectors

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The report shows that Shares received the highest capital inflows in Q2 2020, accounting for 35.9% ($464.6 million) of the total capital inflows followed by Financing, which contributed 23.9% ($309.5 million to the total inflows.

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The banking sector came third on the list as it attracted $140.2 million (10.8%) capital inflows, others on the list include; Production $110.8 million (8.6%), Telecoms $105.6 million (8.2%), Trading $68.2 million (5.3%) and Agriculture $48.8 million (3.8%).

Get financial and economic data from Nairametrics on Nairalytics

Capital inflows by origin

The United Kingdom emerged as the biggest source of capital investment in Nigeria. In Q2 2020, investment from the U.K amounted to $428.8 million, a decline of 85.3% compared to $2.91 billion recorded in the previous quarter and 87.1% compared to $3.33 billion in Q2 2019.

Other countries that accounted for the biggest share of capital inflows in Nigeria during the period include, South Africa ($149.3 million), UAE ($145.2 million), Netherlands ($141.3 million) and Singapore (134.4 million).

Capital inflows by destination

In terms of destination, only 6 states received capital inflows in the second quarter of 2020, Lagos State received the giant share with $1.13 billion (87.3%) capital inflows, followed by Abuja with ($145.3 million).

Ogun State received $11 million within the quarter, Niger ($6.86 million), Anambra ($1.16 million) and Kano State, which received $130,000 capital inflows.

Upshot

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  • The decline in capital inflows recorded during the second quarter of 2020 is attributable to the effect of COVID-19 pandemic, which halted economic activities in most parts of the world.
  • Earlier in the week, Nigerian Bureau of Statistics reported that the Nigerian economy contracted by 6.1% as a result of the negative impacts of disruptions caused by the pandemic and the crash in oil price.
  • The latest figure reflects a negative trend and how dwindling inflows is a cause for worry to the Nigerian economy.
  • It is hoped that subsequent quarters will attract more inflows as the government begin to open most aspects of the economy in phases.

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Economy & Politics

Bus fare paid by Nigerian commuters increased by 68.8% in October 2020

The average fare paid by Nigerian commuters for a bus journey intra-city spiked by 68.82% from N190.86 recorded in October 2019 to N322.22 in October 2020

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Mile 2 Road, Bus fare paid by Nigerian commuters increased by 68.8% in October 2020

The average fare paid by Nigerian commuters for bus journey within the city spiked by 68.82% year-on-year from N190.86 recorded in October 2019 to N322.22 in October 2020. This was contained in the transport fare watch report, released by the National Bureau of Statistics (NBS).

The Transport fare watch report for the month of October 2020 covered the following categories namely: bus journey within the city per drop constant route; bus journey intercity, state route, charge per person; air fare charge for specified routes single journey; journey by motorcycle (Okada) per drop; and waterway passenger transport.

READ: Nigeria’s inflation rate jumps to 14.23% in October 2020

According to the report, the average fare paid by Nigerians for a bus journey within a city also increased by 4.03% when compared to N309.73 recorded in September 2020. Meanwhile, States with the highest bus journey fare within the city were Zamfara (N585.34), Bauchi (N504.78), and Cross River (N431.04); while States with the lowest bus journey fare within the city were Abia (N192.11), Kebbi (N205.47), and Borno (N208.15).

READ: These 3 states are the most expensive to travel from in Nigeria

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Highlights

  • Average fare paid by commuters for bus journey intercity increased by 9.25% to N2,209.84 as against N2,022.7 recorded in September 2020, while it increased by 35% compared to N1,636.86 recorded in the corresponding month of 2019.
  • States with the highest bus journey fare intercity were Abuja FCT (N4,376.09), Lagos (N3,073.41), and Sokoto (N3,055.12); while States with the lowest bus journey fare intercity were Bayelsa (N1,473.67), Enugu (N1,560.00), and Bauchi (N1,560.49).
  • Average fare paid by commuters for journey by motorcycle per drop increased by 3.88% month-on-month and by 115.50% year-on-year to stand at N265.41 in October 2020 from N255.51 and N123.16 respectively.
  • States with the highest journey fare for motorcycle per drop were Niger (N1,476.40), Kogi (N372.45), and Rivers (N352.47); while states with the lowest journey fare for motorcycle per drop were Adamawa (N78.49), Katsina (N106.20), and Kebbi (N135.75).
  • In terms of air travel, the average fare paid by passengers for specified routes single journey decreased by -1.70% when compared to N36,884.59 recorded in September 2020. It however increased by 18.42% (year-on-year) to stand at N36,256.08 as against N30,615.43 recorded in October 2019.
  • States with the highest air fare were Anambra (N38,500.00), Cross River (N38,460.00), Jigawa (N38,250.00); while States with the lowest air fare were Akwa Ibom (N32,750.00), Sokoto (N33,250.00), and Gombe (N34,800.00).

What you should know

Nairametrics reported in October that the average fare paid by commuters for a journey by motorcycle per drop, more than doubled in September 2020 when compared to the corresponding month in 2019, increasing by 111.11% to stand at N255.51 in the month.

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READ: NBS discloses States with highest bus fares in Nigeria (Full List)

Bottom line

The persistent increase in the prices of transport fares across the country is a resultant effect of the Covid-19 pandemic, which necessitated drivers and transporters to reduce the number of commuters they carry at a time.

This is in line with the health measures implemented by the Federal government to help curb the spread of the corona virus in the country.

Explore Data on the Nairametrics Research Website

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Economy & Politics

PIB and Electoral Amendment Bill pass second reading in House of Reps

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Reps to investigate alleged illegal withdrawal of $1.05 billion from NLNG account, NDDC Probe: Reps give Akpabio 48 hours to publish name of lawmakers who got contracts, PIB and Electoral Amendment Bill pass second reading at House of Reps

The Petroleum Industry Bill (PIB) and the Electoral Act Amendment Bill has passed second reading in the House of Representatives.

This was disclosed by Channels TV on Tuesday after both bills were addressed by Lawmakers for the second time during plenary.

On the Petroleum Industry Bill

Rep leader, Alhassan Doguwa, said the PIB has been in the pipeline since the firth assembly and hopes the 9th Assembly would be able to pass the bill.

Chairman of the House Committee on  Upstream Petroleum, Musa Adar, stated that Nigeria needs the PIB, as it does not have the luxury to be irresponsible with resources. Citing the effects of the pandemic on the economy, he added that Nigeria’s needs a mature oil industry that will maximize productivity and compete with other crude oil and gas exporting nations in the continent.

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Minority Leader, Ndudi Elumelu, said the PIB is a necessity, as the world is going green and Nigeria needs to maximize its oil and gas sector, and also explore other options.

The world is looking to go green in less than 20 years and it makes it pertinent for Nigeria to gain maximally from the oil sector and look to explore other oil products before petroleum goes obsolete as a commodity,” he said.

(READ MORE: The new PIB may scrap DPR, PPRA, others)

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On the Electoral Act Amendment Bill

The purpose of the Bill is to regulate the Electoral process across Federal and Local government levels, in order to give it more transparency.

The bill was sponsored by Rep. Aishatu Dukku (APC-Gombe). She added that the bill is necessary to fix Nigeria’s flawed electoral system. 

“This amendment has become necessary because of the flaws observed in our electoral system. It’s no longer news that our electoral experiences since 1999 show a strong correlation between an efficient and effective electoral legal framework and the conduct of free, fair, and credible elections.

“In fact, amendments of our electoral laws were long identified as priority legislation by the National Assembly, because of the need to consolidate on the gains of our democratic achievements and to also address the lacuna identified in the electoral legal framework.

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“A typical example is the case of the Kogi Governorship election in 2016, where a leading candidate died after the commencement of polls, but before the declaration of results.

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“In addition to this are concerns that the legal framework on certain issues should be well settled ahead of the 2023 elections, such as the use of technological devices like the card reader and electronic voting system.

“Also, criteria for substitution of candidates, disclosure of the source of funds contributed to political parties, replacement of lost or destroyed permanent voters card, the penalty for the possession of fake voters’ card, dates for conducting primary elections, shall not be earlier than 150 days and not later than 120 days before the date of the election, etc.

“The bill, therefore, seeks to address many loopholes in our electoral system by way of amending over 300 clauses (including new provisions) of the Electoral Act 2010,” she said.

What you should know 

Nairametrics reported last week that the Minister of State for Petroleum Resources, Timipreye Sylva said the Petroleum Industry Bill (PIB) may be passed into law by the first quarter of 2021.

“There is no better way of diversifying the country’s economy than through a well-developed oil and gas industry, particularly with the huge gas resources in Nigeria. So, PIB will be the most credible attempt towards a holistic diversification of the Nigerian economy,” he added.

House of Representative Speaker, Femi Gbajabiamila, also disclosed that the House would ensure that it passes the Petroleum Industry Bill within the next six months or probably less.

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Economy & Politics

Budget proposal review of MDAs is a legislative right – Femi Gbajabiamila

Gbajabiamila has stated that the budget review on MDAs conducted by the House of Assembly is a right of the National Assembly.

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House of Reps determined to resolve ASUU issues and empower youths - Gbajabiamila , #EndSars: House of Reps to draft new Police legislation in 30 days, Speaker Gbajabiamila asks NLC to suspend strike, offers palliatives, #EndSARS: House of Representatives will do everything to deliver a policing system that works - Gbajabiamila

The Speaker of the House of Representatives, Femi Gbajabiamila, stated that the budget review on MDAs conducted by the House of Assembly is a right of the National Assembly. He added that the House of Assembly has the constitutional right to ask questions on MDA budgets.

The speaker disclosed this on Tuesday during the plenary session of the House in Abuja. The House spent most of last week grilling Ministers and Heads of MDAs over their budgets for the 2021 fiscal year.
The speaker said during the budget defence week, some MDAs Chief viewed the process as an “undue incursion”.
I have observed during the recent budget defence process that there are still some MDAs that consider the exercise of the legislative authority to review their budget proposals as an undue incursion into the management of their offices,” he said.
When the committees of the House of Representatives and the Senate convene to review the heads of expenditure contained in the Appropriation Bill, we do so in the exercise of clear and concise constitutional authority.”
He also added that budget review is an obligation of the House and that budgets need to be done on time.
It is in the best interest of our country that all parties concerned subject themselves to this process in good faith knowing that this too, is an obligation of service to our country. We will pass the budget, we will do it early and we will do it right,” he added.
The speaker revealed that the House has started process to review the Electoral Act in preparation for the 2023 elections.
“Perfecting the process through which we choose the people that will serve in government is an essential requirement for the continued development of our democracy.”

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