By Babajide Komolafe & Elizabeth Adegbesan
Foreign investment into Nigeria fell by 48 per cent, quarter-on-quarter, the third quarter of the year to $2.9 billion triggered by increasing apathy of foreign portfolio investors to the nation’s financial markets due to political uncertainty and rising interest rate in the United States of America.
Nigeria Bureau of Statistics disclosed this, yesterday, in its Capital Importation report for Q3’18.
The report showed that while Foreign Direct Investments, FDI, rose by 103 per cent, Foreign Portfolio Investment, FPI, and “other investments” dropped by 58.17 per cent and 46.9 per cent respectively.
According to NBS, “the total value of capital importation into Nigeria stood at $2.855 billion in the third quarter of 2018. This was a decrease of 48.21 percent compared to Q2 2018 and a 31.12 percent decrease compared to the third quarter of 2017.
“The largest amount of capital importation by type was received through Portfolio investment, which accounted for 60.5 percent or $1.723 billion of total capital importation, followed by other investment, which accounted for 21.07 percent $601.53 million of total capital, and then Foreign Direct Investment FDI, which accounted for 18.58 percent $530.63 million of total capital imported in the third quarter.
“By sector, capital importation as shares, which is closely related to Equity investment (FDI and Portfolio Investment) dominated the third quarter of 2018 reaching $1.667 billion of the total capital importation in the quarter.
“The United States emerged as the top source of capital investment in Nigeria in the third quarter of 2018 with $911.33 million. This accounted for 31.91 percent of the total capital inflow in Q3 2018.”
United Kingdom came second as the top source of capital investment with $871.147 million , representing 30.5 percent of total capital inflow.
The NBS report revealed that 58.17 percent decline in FPI during the quarter was driven by 51.66 percent fall in money market instruments which fell by $1.38 billion to $1.29 billion in Q2’18 from $2.67 billion in Q2’18.
This was followed by 63.37 percent fall in equity (shares) investment, which dropped by $653.92 million to $394.47 billion in Q3’18 from $1.048 billion in Q2’18.
FPI into bonds also fell sharply by 91 percent to $37.48 million in Q3’18 from $400.14 million in Q2’18.