By Yinka Kolawole
The Lagos Chamber of Commerce and Industry (LCCI) has predicted that capital inflows into the Nigerian economy will remain weak, the trend that saw a drop by 51 percent to $7.1 billion in the first half of 2020 (H1’20) from $14.6 billion in the corresponding period of 2019 (H1’19).
Speaking at the 132nd Annual General Meeting (AGM) of the Chamber in Lagos yesterday, President, LCCI, Mrs Toki Mabogunje, stated: “Nigeria attracted a total of $7.1 billion in private capital in the first half of the year, compared to $11.8 billion and $14.6 billion reported in the corresponding period of 2018 and 2019 respectively, and this suggests that investor confidence in the Nigerian economy is currently weak. “Capital inflow to the economy is expected to remain weak basically due to uncertainties regarding significant appreciation in international oil prices. Other factors such as lack of clarity in the policy environment, social unrest and foreign exchange illiquidity will also weaken the country’s investment attractiveness.”
Mabogunje recalled that capital importation to Nigeria plunged by 78 percent to $1.2 billion in the second quarter of the year, compared to an inflow of $5.9 billion attracted in the first quarter.
“The sharp reduction in capital importation was driven by the elevated risk in the global and domestic macroeconomic environment occasioned by the pandemic. Also, the capital control policy of the Central Bank of Nigeria (CBN) contributed to the drop in private capital flows,” she added.
Reviewing the business environment, Mabogunje noted that the year 2020 is a historic one for the global and domestic economy, characterized significantly by the coronavirus pandemic the EndSARS protest.