Market News

Nigeria’s capital importation experienced a significant decline in the second quarter of 2024, according to the National Bureau of Statistics (NBS) Capital Importation report.

The figures show a 22.85% drop from $3.37 billion in the first quarter to $2.60 billion. Despite this quarter-on-quarter decrease, the current figure represents a substantial year-on-year increase of 152.8% from $1.03 billion in the same period last year.

Portfolio Investment emerged as the leading type of capital import, accounting for 53.93% of the total at $1.40 billion. Other investments totalled $1.169 billion, making up 44.92%. Within this category, loans dominated, constituting a staggering 98.6% at $1.15 billion, while other claims received a modest $16 million during the quarter.

Breaking down the Portfolio Investment category, money market instruments took the largest share at $1.07 billion, representing 76.6% of total foreign portfolio investment. Bonds accounted for 12.6% at $177.79 million, while equities contributed 10.67% at $149.93 million.

However, the report noted a quarter-on-quarter decline in capital imports for both bonds and money market instruments. Foreign capital inflow into bonds saw a sharp decline of 57.75%, while money market instruments experienced a 32.92% drop compared to the first quarter of 2024.

Foreign Direct Investment (FDI) lagged significantly behind, contributing just $29.83 million, or 1.15% of the total capital importation in Q2 2024. The poor performance of FDIs has been a persistent trend in recent quarters, attributed to an increase in the Monetary Policy Rate (MPR). This increase has resulted in cash being diverted from the real sector of the economy to money market instruments.