Nigeria’s capital importation in the second quarter of 2024 witnessed a significant drop, falling by 22.85% from $3.37 billion in the first quarter to $2.60 billion, according to the National Bureau of Statistics (NBS) Capital Importation report. Despite this quarter-on-quarter decline, the figure represents a remarkable 152.8% increase when compared to the same period in 2023, where capital imports stood at $1.03 billion.
Breakdown of Capital Importation by Type
The report provides insight into the different types of capital imports during Q2 2024, with portfolio investments taking the lead.
Portfolio Investment
Portfolio investment contributed $1.40 billion, accounting for 53.93% of total capital importation. The bulk of these portfolio investments were in money market instruments, which stood at $1.07 billion, representing 76.6% of total portfolio investment. Investments in equities amounted to $149.93 million, or 10.67%, while foreign capital inflows into bonds reached $177.79 million, making up 12.6%. However, quarter-on-quarter declines were recorded in bonds and money market instruments, with foreign capital inflows into bonds dropping by 57.75% and into money market instruments by 32.92%.
Other Investments
Other investments, the second-largest category, brought in $1.169 billion, making up 44.92% of total capital importation. The bulk of these investments came in the form of loans, which amounted to $1.15 billion, representing 98.6% of the other investments category. Foreign capital under “other claims” contributed just $16 million during the quarter.
Foreign Direct Investment (FDI)
FDI performed the weakest, with a contribution of only $29.83 million, making up a mere 1.15% of total capital importation in Q2 2024. FDIs have struggled in recent quarters, largely due to rising monetary policy rates (MPR), which have diverted funds from the real sector to money market instruments.
Capital Importation by Sectors and Place of Origin
Top Sectors Receiving Capital Inflows
The banking sector remained the top recipient of foreign capital, attracting $1.12 billion in Q2 2024, which accounted for 43.15% of total capital importation. This was followed by the production/manufacturing sector, which brought in $624.71 million (23.99%), and the trading sector, with $569.22 million (21.86%).
Leading Sources of Capital Imports
In terms of source countries, the United Kingdom led the pack, contributing $1.12 billion (43.01%) of total capital inflows. The Netherlands followed with $577.82 million (22.19%), while the Republic of South Africa rounded out the top three with $255.98 million (9.83%).
This data underscores the dynamic nature of capital flows into Nigeria, particularly in sectors like banking and manufacturing, while also reflecting shifts in foreign investment preferences.
Source: Nairametrics