LAGOS, Nigeria (VOICE OF NAIJA)-Nigeria’s capital importation rose to $2.60 billion in the second quarter of 2024, a significant increase of 152.81% year-on-year from $1.03 billion in Q2 2023.
This information comes from the most recent capital importation report issued by the National Bureau of Statistics on Tuesday.
However, despite the strong annual growth, the figure represents a 22.85% decline from the $3.38 billion recorded in the first quarter of 2024.
This quarterly decrease underscores ongoing fluctuations in investor sentiment, influenced by global economic uncertainties and domestic challenges.
The report read, “In Q2 2024, total capital importation into Nigeria stood at US$2,604.50 million, higher than US$1,030.21 million recorded in Q2 2023, indicating an increase of 152.81%. In comparison to the preceding quarter, capital importation declined by 22.85% from US$3,376.01 million in Q1 2024.”
Portfolio investments were the main driver of capital inflows, contributing $1.40 billion, or 53.93% of the total.
These investments typically involve foreign investors placing capital in Nigeria’s stocks, bonds, and other financial instruments, seeking quick returns.
Other investments, including loans, trade credits, and debt financing, followed closely, amounting to $1.17 billion and representing 44.92% of the total inflows.
In contrast, Foreign Direct Investment (FDI) was much lower, with just $29.83 million, accounting for only 1.15% of the total.
This trend underscores Nigeria’s ongoing struggle to attract long-term capital necessary for sustainable economic growth and job creation.
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The banking sector received the largest share of capital importation, amounting to $1.12 billion, or 43.15% of the total inflows for the quarter.
This dominance reflects the vital role banks play in channeling foreign investments and providing access to Nigeria’s financial markets.
Trailing the banking sector, the production and manufacturing sector secured $624.71 million, accounting for 23.99% of the total inflows.
The capital inflow into production and manufacturing indicates a positive outlook for industrial activity, potentially signaling a gradual recovery in Nigeria’s manufacturing capacity.
The trading sector also attracted substantial inflows, receiving $569.22 million (21.86%), demonstrating the resilience of trade activities in the country.
Geographically, Lagos State remained the top destination for capital importation, securing $1.37 billion, or 52.52% of total inflows.
As Nigeria’s commercial hub, Lagos offers foreign investors a strategic entry point, supported by its strong infrastructure and vibrant business environment.
Abuja (FCT) closely followed, attracting $1.24 billion, representing 47.48% of the total capital inflows.
In contrast, Ekiti State saw minimal investment, with only $0.0003 million during the quarter, underscoring the concentration of capital in more established economic hubs.
The report also identified the key sources of these inflows, with the United Kingdom leading the way, contributing $1.12 billion (43.01% of the total), reaffirming its role as a major player in Nigeria’s financial landscape.
The Netherlands was the second-largest source of capital, contributing $577.82 million (22.19%), followed by the Republic of South Africa in third place with $255.98 million (9.83%).
Among banks, Citibank Nigeria Limited led with $818.46 million, accounting for 31.43% of total inflows.
Standard Chartered Bank Nigeria Limited came next with $654.79 million (25.14%), while Rand Merchant Bank Plc received $488.59 million (18.76%).