Nigeria’s total capital importation rose by 210.16% in the first quarter of 2024 from $1.08 billion recorded in Q4, 2023 to $3.37 billion in the period under review.
This is according to the National Bureau of Statistics (NBS) capital importation report in 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
Portfolio Investment led with $2.07 billion, making up 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 in Q1 2024.
The Banking sector saw the highest inflow, receiving $2.06 billion constituting 61.24% of total capital imports 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 5.68% of capital imports in the country.
Standard Chartered Bank also recorded around $399 million in capital import inflow in Q1, 2024, beating its full-year total in 2023 at $384 million.
Capital imports by origin and state destination
During the reference period, the majority of capital importation came from the United Kingdom, amounting to $1.81 billion, representing 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%).
Among the three states that recorded capital importation during the quarter, Lagos State was the top destination with $2.78 billion, accounting for 82.42% of the total.
Abuja (FCT) followed with $590 million (17.58%), and Ekiti State with $0.01 million.
Only three of the 36 states and FCT recorded capital imports during the period, leaving around 34 states recording zero capital imports in the year’s first quarter.
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%).
Why the spike in capital imports
The over 200% increase in capital imports during the quarter, especially in portfolio investment, stems from the 600 basis points hike in MPR by the CBN and the high returns in FGN bonds and CBN Treasury bills during the period.
During the first quarter, investors displayed a voracious appetite for FGN and CBN securities following the high returns.
The meagre inflow of foreign capital into the real economy in foreign direct investment confirms the fears of players in the real economy following the interest rate increase by the CBN as they claimed it is going to suck up capital from the real economy into the financial sector.
