Nigeria's Capital Inflows Shrink to $5.33bn in 2022 Amid 33% Drop in

By Adedapo Adesanya

Capital importation, which measures the total number of foreign investments into a country, plunged in Nigeria in 2022 by 20.5 per cent to $5.33 billion from $6.7 billion in 2021.

This was contained in the Nigeria Capital Importation (Q4) Report published by the National Bureau of Statistics (NBS) on Tuesday, where it was revealed that foreign direct investments (FDIs), portfolio investments, and other investments were heavily impacted last year.

The report showed that FDIs dropped to $468.08 million from $698 million in 2021, indicating a 33 per cent decline, while portfolio investment dropped to $2.4 billion, with trade credits, loans, currency deposits, and other claims, which are classified under other investments, amounted to $2.4 billion in the year under review.

In the period under review (Q4), total capital inflows into Nigeria stood at $1.1 billion, lower than the $2.2 billion recorded in Q4 2021, indicating a decrease of 51.5 per cent year-on-on.

In the quarterly analysis, when compared to the preceding quarter, capital importation also fell by 8.5 per cent from $1.2 billion in Q3 2022.

The largest capital importation during the period was received from Other Investment, which accounted for 65.2 per cent, amounting to $691.23 million of total capital imported in Q4 2022. This was followed by Portfolio Investment with 26.9 per cent or $285.26 million, and FDIs with 7.9 per cent totalling $84.23 million.

Giving a sectorial breakdown, the NBS report showed that capital inflows into the production sector recorded the highest at $392.54 million, representing 37.0 per cent of total capital imported in Q4 2022. This was followed by capital imported into the banking sector, valued at $255.45 million, 24.1 per cent, and Telecoms, with $168.27 million (15.9 per cent).

Capital Importation by Country of Origin reveals that the United Kingdom ranked top in Q4 2022 with $455.24 million, accounting for 42.9 per cent. This was followed by the Republic of South Africa and the United Arab Emirates at $119.31 million (11.3 per cent) and $116.82 million (11.0 per cent), respectively.

By Destination of Investment, Lagos state remained the top destination in Q4 2022 with $600.54 million, accounting for 56.6 per cent of total capital investment in Nigeria. This was followed by Abuja (FCT), valued at $424.50 million (40.0 per cent).

Categorization of Capital Importation by Banks showed that in the quarter, Citibank Nigeria Limited ranked top in Q4 2022 with $308.72 million (29.1 per cent). This was followed by Standard Chartered Bank Nigeria Limited with $232.45 million (21.9 per cent) and Rand Merchant Bank with $102.00 (9.6 per cent).