Investment inflows into Nigerian economy surged by 95 percent or $884.1 million in the second quarter on 2017 as portfolio investors, particularly, showed confidence in the country still battling economic downturn.
The National Bureau Statistics (NBS) estimates that total investment inflows into Nigeria reached $1.7923 billion in the second quarter of 2017, $884.1 million more than the figure recorded in the first quarter and indicating a growth of 95.02 percent.
Year on year inflows increased by 43.6percent from the $1,042.2 million recorded about same period on 2016. On a month on month basis, the economy attracted the largest inflows in May, reported at $616.5 million, followed by June with $612.6million and then April with $563.3 million.
“The main driver of the quarterly growth in capital importation in the second quarter was Portfolio Investments, which increased by 145.7 percent, followed by Other Investments, which grew by 95.02 percent, and then Foreign Direct Investment (FDI), which increased by 29.8 percent over the previous quarter,” the NBS said in its latest capital importation report released on Tuesday.
The NBS categorises investment inflows which it calls ‘Capital Importation’ into three main investment types, including, Foreign Direct Investment (FDI), Portfolio Investment and what it calls ‘Other Investments’, with each comprising various sub-categories.
As contained in the report, Portfolio Investment was the largest component of imported capital in the second quarter of 2017, and accounted for $770.5 million, or 43 percent of the total. This was closely followed by Other Investments, which accounted for $747.5 million, or 41.7 percent and then FDI, which accounted for $274.4 or 15.3 percent during the quarter.
A year on year comparison of the three investment types indicates that Portfolio Investments increased by 128.4 percent, from the $337.3 million recorded in second quarter of 2016. Other Investments also increased by 43.6 percent, from the $520.6 million reported in the same quarter of 2016, while FDI grew by 48.9 percent, from $184.3 million.
The total amount of FDI recorded during the quarter was $274.4 million, representing an increase of 29.8 percent over the previous quarter and a 48.9 percent increase over the same period of 2016.
According to the data office, Equity investments accounted for the majority of total FDI imported in the second quarter of 2017, accounting for 99.9 percent ($274.1 million) of total FDI and increasing by 30.5 percent over the last quarter. Other Capital under FDI accounted for the balance of 0.1percent ($300,000) of total FDI, showing some 76.6 percent drop over the previous quarter.
The second quarter recorded an estimated $770.51million in portfolio investments. This figure was 145.7 percent higher than the amount reported in the first quarter of the year, and 128.4% higher than the amount reported in the same period of 2016.
An analysis of the composition of portfolio investments shows that Equities recorded the largest share, accounting for 79.7 percent, or $614.05 million of the total, followed by Money Market Instruments, which accounted for 12.8 percent, totaling $98.6 million, while Bonds accounted for 7.5 percent or $57.9 million.
Other investments recorded an increase of 95 percent over the quarter and 43.6 percent over the same period of 2016.
The NBS said Loans continued to dominate Other Investments also as seen in previous quarters, accounting for 100 percent of capital imported in this category during the second quarter.
The other components of Other Investments did not report any figures for the second quarter of 2017, however this may be revised in the next quarter when more information becomes available. Capital is either imported in the form of shares, or directly imported by different sectors of the economy.
In the second quarter of 2017, the value of share capital imported was $932.58 million, which represents an increase of 548.5 percent relative to the previous quarter, and an increase of 168 percent relative to the second quarter of 2016.
“This was by far the sector to attract the largest amount of capital in the second quarter of the year,” the NBS stated in the report.
“This was a significant increase relative to recent quarters, the highest amount since the third quarter of 2015, when it declined significantly from $1,736.48 million to $831.88 million in the fourth quarter of 2015.
“Share capital investment, which is closely related to Equity investment (FDI and Portfolio) was largely responsible for huge increase in capital importation during the quarter. The proportion of Shares compared to total value of capital importation over the previous quarters,” the NBS stated.
Onyinye Nwachukwu, Abuja
