By Michael Eboh
The non-passage of the Petroleum Industry Bill, PIB, has started to take its toll, as foreign investments into the oil and gas sector dropped by $197.31 million, about N31.6 billion in three months, between April and June 2014.
According to the second quarter, Q2, Nigerian Capital Importation Report, released by the National Bureau of Statistics, NBS, the oil and gas sector accounted for 0.07 per cent of total capital imported into Nigeria with $3.83 million, about N612.8 million.
The NBS stated that total capital imported into the Nigerian economy in Q2 2014 was $5.804 billion, rising by $1.899 billion or 48.64 per cent from $3.905 billion recorded in the opening quarter of this year.
“Relative to the $5.618 billion recorded in the corresponding quarter of 2013, capital importation demonstrated positive year on year growth of $186.23 million or 3.32 per cent,” the NBS said.
According to the NBS, capital importation can be divided into three main investment types: Foreign Direct Investment, FDI; portfolio investment; and other investments, each comprising of various sub-categories.
Further analysis of the report, revealed that in Q2 2013, the oil and gas sector recorded foreign investments inflow of $70.827 million, rising to $201.14 million in Q1 2014.
However, in the Q2 2014, inflows into the oil sector recorded a sharp decline, dropping by 98.1 per cent to $3.83 million.
Specifically, the NBS said, “Oil and Gas, representing just 0.07 per cent of capital imported in the second quarter of 2014, showed some of the greatest declines in value. From the $70.83 million recorded a year earlier, it saw a $67.00 million or 94.59 per cent decline in value, with its share of total capital imported declining 1.19 per cent points from the 2.26 per cent it represented in quarter two of 2013.
“Despite its slow growth throughout 2013 and into the opening quarter of 2014, the second quarter saw another sharp drop in inflows, by $197.31 million or 98.10 per cent from the $201.14 million recorded in 2014’s first quarter.”
Continuing, the report said that majority of the funds came from the United Kingdom with $3.973 billion, representing 68.46 per cent of the total inflow in the period under review.
The United States followed, accounting for 17.28 per cent of the total inflow in Q2 with $1.002 billion; Belgium followed with $373.69 million, representing 6.44 per cent.
Others are: France — $89.75 million; Mauritius — $79.34 million; Switzerland — $60.57 million; South Africa — $56.84 million; and Lebanon — $27.81 million.
Commenting on capital importation by country of origin, the NBS said, “The UK is also growing in dominance of the capital importation sector of Nigeria. Its quarter two, 2014 share is the largest of the total, with previous shares of 54.63 per cent in quarter one of 2014, and 53.86 per cent in the corresponding quarter of 2013.
“Indeed, inflows from the UK are increasing, with year on year capital importation growth of $947.73 million or 31.32 per cent, and a $1.84 billion or 86.26 per cent rise from the opening quarter of 2014.
“The story for the second greatest contributor, the US, however, is a little more mixed. Despite negative year on year growth of 6.65 per cent, translating as $71.49 million less imported, there has been an increase in inflows thus far in 2014, rising by $471.19 million or 88.62 per cent from the preceding quarter.”