Nigeria’s capital inflow slumps by 76%

Indicators from the Nigerian Bureau of Statistics (NBS) has revealed that the inflow of capital into the country for the second quarter of 2016 has slumped by 75.73 percent from figures recorded in the second quarter of 2015.

According to the NBS, the total value of capital imported into Nigeria in the second quarter of 2016 was estimated to be $647.1 million, which represents a fall of 8.98 percent in Q2 2016 from $710 million in the first quarter of 2016, and a fall of 75.73 percent from $2,672 million imported in the second quarter of 2015.

“This provisional figure would be the lowest level of capital imported into the economy on record, and would also represent the largest year on year decrease and the second consecutive quarter in which these records have been set”

A breakdown of the figures shows that portfolio Investments declined by 9.5 percent from $271.0 million in the first quarter of 2016 to $245.3 million in the second quarter of 2016, however an 88.8 percent year on year (Y-o-Y) decline was recorded from $2.2 billion in recorded Q2 2015 to $245.3 million in Q2 2016.

Similarly, Foreign Direct Investments (FDI) which stood at $133 million in the current year’s second quarter fell by 23.8 percent from $174.4 million recorded in the first quarter of the year. In the same way, FDI’s recorded a 37 percent Y-o-Y drop to $133 million for the second quarter of 2016 from $211.1 million in the corresponding period of 2015.

Corroborating this is the 44.8 percent reduction in foreign inflows participation on the Nigerian Stock Exchange (NSE) for the month of July from N42.46 billion in June to N23.43 billion in July 2016.

According to the NSE monthly report, foreign portfolio and domestic participation within Nigeria’s stock market generally decreased by 44.38 percent from January to July in 2016.

An analysis of total transactions for the first seven months of 2016 showed that a significant decrease of N570 billion was recorded, signifying a 44.38 percent decline from N1.28 trillion recorded within the same period in 2015 to N714.60 billion in 2016.

On a month on month basis, total transactions at the Stock Exchange decreased by 42.13 percent from N155.85 billion recorded in June 2016 to N90.19 billion in July 2016.

The report noted that domestic investors slightly outperformed foreign counterparts by about 1.8 percent in July.

Domestic transactions decreased by 39.66 percent from N76.08 billion in June 2016 to N45.91 billion in July 2016, while Foreign Portfolio Investment (FPI) transactions decreased by 44.48 percent from N79.76 billion in June 2016 to N44.28 billion in July 2016.

The NSE monthly report added that “In comparison to the same period in 2015, total FPI transactions decreased by 54.99 percent from N696.46 billion to N313.49, whilst the total domestic transactions decreased by 31.83 percent from N588.36billion to N401.10 billion.”

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