Foreign Capital Into Nigeria’s Energy Industry Plunges 42.8% to $3.64bn in 2023

March 1, 2024
Nigeria's Energy Industry

By Adedapo Adesanya

Foreign capital inflows, which gauges the level of foreign investment into the country, through the Nigerian oil and gas industry in 2023 dropped by 42.8 per cent to $3.64 million from the $6.37 million recorded in 2022.

This is contained in the latest data obtained from the Nigeria capital importation report for the fourth quarter of 2023 released recently by the National Bureau of Statistics (NBS).

The NBS revealed that total foreign capital inflow into the oil and gas sector in 2023 accounted for 0.09 per cent of total foreign capital inflow into the Nigerian economy in 2023.

Business Post had reported that Nigeria’s economy grew by 2.74 per cent in 2023, lower than the 3.1 per cent posted in 2022.

Giving a breakdown of inflow into the petroleum industry in the year under review, the NBS stated that in the first and second quarter of 2023, capital imported into the sector stood at $0.75 million and nil, respectively, while in the third and fourth quarter of the year, $2.04 million and $0.19 million foreign capital was imported into the sector, respectively.

In comparison, in the first quarter of 2022, $0.61 million foreign capital inflow was recorded in the oil and gas industry, while in the second, third and fourth quarters had $1.93 million, $1.57 million and $2.26 million apiece.

The NBS noted that the production and manufacturing sector recorded the highest foreign capital inflow in the year under review, accounting for 40.73 per cent of total inflow with $1.59 billion; followed by the banking sector and with $832.64 million, accounting for 21.32 per cent of total inflows.

The finance sector accounted for 11.42 per cent of total inflows, with $445.94 million, while the Information Technology Services industry accounted for 5.79 per cent of total foreign capital inflow with $216.06 million capital inflow.

In its analysis of capital importation in the fourth quarter of 2023, the NBS said: “In fourth quarter 2023, total capital importation into Nigeria stood at $1.09 billion, slightly higher than $1.06 billion recorded in the fourth quarter of 2022, representing an increase of 2.62 per cent.

“In comparison to the preceding quarter, capital importation rose by 66.27 per cent from $654.65 million in the third quarter of 2023. Other Investment ranked top accounting for 54.64 per cent ($594.74 million) of total capital importation in the fourth quarter of 2023, followed by Portfolio Investment with 28.46 per cent ($309.76 million) and Foreign Direct Investment (FDI) with 16.90 per cent ($183.97 million).”

The NBS added that in the fourth of 2023, capital importation into the country originated largely from the United Kingdom with $267.24 million, accounting for 24.55 per cent of the total inflow; followed by Mauritius with $226.18 million inflow into Nigeria, accounting for 20.78 per cent of the total inflow, while $149.93 million, about 13.77 per cent of the total inflow emanated from the Netherlands.

Lagos State remained the top destination for capital importation in the fourth quarter of 2023 with $771.68 million, accounting for 65.38 per cent of total capital importation, followed by Abuja with $370.80 million, accounting for 34.07 per cent of total inflow and Rivers State with $6 million, representing 0.55 per cent of total inflow.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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