Foreign Investment into Nigeria’s Oil Sector Drops 51%

By Adedapo Adesanya

A data recently released by the National Bureau of Statistics (NBS) revealed that foreign investment inflow into the Nigerian oil and gas industry dropped 51 percent within three months.

The stats office said in its report that investments from non-resident investors in the first quarter of 2020 went down to $10.1 million from $20.6 million recorded in the fourth quarter of 2019.

In the report titled National Capital Importation Report for the Q1 2020, the statistical body also stated that foreign investment inflow into the oil and gas sector in the first quarter of 2020 accounted for 0.17 percent of the total inflow into the Nigerian economy in the period under review.

The NBS further stated that the inflow into the sector in the first quarter of 2020 was 41.4 percent, lower than the $17.22 million inflow into the sector recorded in the same period in 2019.

The bureau also stated that total foreign capital inflow into the oil and gas sector in 2019 stood at $216.2 million, representing 0.9 percent of total inflow into the economy in the year.

The total value of capital importation into Nigeria stood at $5.9 billion in the first quarter of 2020, stating that this represented an increase of 53.9 percent compared to fourth quarter 2019 and 31.2 percent decrease compared to the first quarter of 2019.

The largest amount of capital importation by type was received through portfolio investment, which accounted for 73.6 percent ($4.3 billion) of total capital importation, followed by other Investment, which accounted for 22.7 percent ($1.33 billion) of total capital, and then Foreign Direct Investment FDI, which accounted for 3.7 percent ($214.3 million) of total capital imported in the first quarter of 2020.

The NBS report further noted that the banking sector recorded the highest foreign capital inflow in the quarter under review, as foreign investment inflow into the sector stood at $2.99 billion.

The United Kingdom emerged as the top source of capital investment in Nigeria in first quarter 2020 with $2.9 billion. This accounted for 49.7 percent of the total capital inflow in the first quarter of 2020.

By destination of investment, Lagos state emerged as the top destination of capital investment in Nigeria in first quarter 2019 with $5.1 billion This accounted for 87.7 percent of the total capital inflow in Q1 2020.

By bank, Standard Chartered Bank Nigeria Limited emerged at the top of capital investment in Nigeria in the first quarter of 2020 again with $1.7 billion. This accounted for 28.3 percent of the total capital inflow in the first quarter of 2020.