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As Nigeria’s economy continues to hemorrhage heavily amidst mass capital flight which has continued unabatedly, the National Bureau of Statistics (NBS) yesterday released some statistics which shows that the total value of capital imported into the country in the second quarter of 2016 was estimated to be $647.1 million. This represents an 8.98 percent drop relative to the first quarter, and a fall of 75.73 percent compared to second quarter of 2015 record.
This NBS figure in a report it captioned as “Preliminary Summary Report: Quarter Two 2016,” would be the lowest level of capital imported into the economy on record, and would also represent the largest year on year decrease.
“This would be the second consecutive quarter in which these records have been set,” the NBS stated.
In the second quarter of 2016 the value of share capital imported was estimated to be $202.70 million, which as for capital importation as a whole sets the record for the lowest value for the second consecutive quarter. The figure represents a decline of 16.77 percent relative to the previous quarter, and a decline of 84.17 percent relative to the same quarter of 2015.
This is a smaller year on year decline than in the previous quarter, in which it was 87.41 percent. Share capital accounted for 31.32 percent of total capital imported, less than half its share in the second quarter of 2015 of 70.41 percent and the lowest level in seven years.
The figure represents a decline of 16.77 percent relative to the previous quarter, and a decline of 84.17 percent relative to the same quarter of 2015.
NBS stated that the continuing decline in the value of capital imported into the economy is symptomatic of the difficult period that the Nigerian economy is going through.
The Q2 saw the economy enter into the first recession during the rebased period.
This may suggest less profitable opportunities for investment. In addition, in the Q2 there was considerable uncertainty surrounding future exchange rate policy which may have deterred investors.
According to NBS, the depreciation of the Naira towards the end of the quarter is likely to have contributed to the record decline in capital importation.
Year on year, the importation of capital declined for each broad type – Foreign Direct Investment, Portfolio Investment and Other Investment, but Portfolio investment recorded by far the largest decline of 88.76% year on year, compared with declines of 37.00% and 1.22% for Foreign Direct and Other investment respectively.
Compared to the previous quarter however, Foreign Direct Investment recorded the largest decline of 23.75%, compared with a decline of 9.49% for Portfolio investment and an increase of 1.24% for Other investment.
As a result of these change, Other investment replaced Portfolio as the largest component of capital importation, and accounted for 41.53%, compared with shares of 37.91% and 20.56% for Portfolio and FDI.
For the first time on record, the sector to import the largest amount of capital was Servicing, which accounted for $130.98 million, or 20.24 percent of the total. This follows a large increase relative to both the second quarter of 2015 when the value was $12.83 million, and the previous quarter when the value was $55.05 million.
In all previous quarters, the sector to import the most capital had been either Banking, Financing, Production or Telecommunications.
Amadi Nnamdi
