August 24, 2015

Capital inflow drops by 0.20% in 1st half

‘Price level will remain upbeat’


By Babatunde Jimoh

The value of capitalimported into the country in the second quarter of the year stood at $2,666.36 million, representing a marginal drop of $5.24 million or just 0.20% quarter on quarter Capital importation thus remained relatively unchanged from the $2,671.59 million recorded in the opening quarter of 2015, suggesting that this new, lower level will be maintained as long as an uncertain economic environment remains.

A report released by the National Bureau of Statistics on Nigerian Capital Importation for second quarter, Q2 2015 shows that the second quarter capital imported was $3,137.53 million or 54.06% lower than the $5,803.89 million imported in quarter two of 2014. Capital importation by investment type, according to the report, shows that Portfolio Investment remained the largest of all investment types, with $2,183.15 million in Q2 of 2015, representing 81.88% of all capital imported.

This was $322.50 million or 17.33 per cent  greater than the $1,860.65 million Portfolio Investment recorded in the opening quarter of 2015, when it represented 69.65% of the total. The report added that nonetheless the result returned by Portfolio Investment year on year, its decline remained large at $2,733.99 million or 55.60%.

The key driver of the portfolio investment for the period under review was Equity, which at 84.56% of portfolio investment, increased by $706.70 million or 62.02% from the preceding quarter. Growth in Money Market Instruments further contributed, increasing by $270.39 million or 1,674.78% from $16.14 million in Q1 to $286.53 million in Q2 of 2015.

The remaining component, Bonds, declined on a quarterly basis, $654.58 million or 92.83%, so that its share of total Portfolio investment declined from 26.39% to just 2.31%. Year on year, all sub sectors declined, with Equity suffering the greatest losses, down by $2,029.27 million or 52.36%, accounting for 74.22% of the overall decline. Other Investments, at $272.07 million, represented 15.58% of total Capital Imported, and held the second largest capital inflows by investment type.

Other investments were mainly comprised of Loans, which at $153.23 million represented 56.23% of the total, and Other Claims, which at $117.85 million represented 43.32% of the total. Currency Deposits held the remaining $0.99 million or 0.36%, whilst Trade Credits recorded zero.

Other Claims were up $86.34 million or 274.03%. Year on year, declines in Other Investments were similar, at $141.69 million or 34.24%, although this time were driven by both Loans, which were lower by $83.76 million or 35.34%, and by Other claims, which were lower by $57.55 million or 32.81%.

Foreign Direct Investment (FDI), according to the Bureau report posted the smallest of the investment types in Q2 of 2015, representing $211.14 million or 14.77% of the total. It remains comprised mostly of Equity, at $211.01 million or 99.94% of the total, whilst Other Capital holds the remaining $0.13 million. Declines were observed both on a quarterly basis and annual basis, of $183.47 million or 46.49% and $261.85 million or 55.36% respectively.