BY PETER EGWUATU
THE Central Bank of Nigeria, CBN, yesterday, said that the nation’s Foreign Direct Investment, FDI, dropped by $0.61billion (about N97.6 billion) from $1.47billion (N235.2 billion) in the second quarter of 2013 to $0.86 billion (about N137.6) in the third quarter (Q3) of 2013.
The apex bank stated that at US$4.91 billion in Q3, 2013, aggregate foreign capital inflow declined by 42.8 per cent from US$8.58 billion in Q2, 2013 due to the decline in both direct investment and portfolio investment inflows. Similarly, portfolio investment inflow declined by 52.3 per cent from US$6.52 billion in Q2, 2013 to US$3.11 billion in the review period.
CBN’s External Report stated, “other investment inflows increased by 59.5 per cent from $0.58 billion in Q2, 2013 to $0.93 in Q3, 2013. Portfolio investment inflow remained dominant and accounted for 63.4 per cent of total foreign inflows while direct investment inflows accounted for 17.6 per cent of total. Other investment inflows accounted for the balance.”
The CBN’s report stated that provisional data revealed that Nigeria’s trade balance declined from US$10.60 billion in Q2, 2013 to US$9.86 billion in Q3, 2013. It said, “Trade balance as a percentage of Gross Domestic Product, GDP, declined from 19.07 per cent in Q3, 2012 to 16.20 per cent in Q2, 2013 and 13.79 per cent in Q3, 2013. This development could be attributed to the decline in aggregate export proceeds induced by the fall in oil exports and reflected the country’s over-dependence on oil exports and the need for the diversification of the Nigerian economy.
The apex bank further revealed that share of total trade, exports, imports, total foreign exchange flows and net flow as percentage of GDP declined in the review period to 57.7, 33.7, 18.1, 72.5 and 35.2 per cent, respectively, compared with their levels in Q2, 2013. This implies that the Nigerian economy is well integrated into the global economy.