Foreign investments into Nigeria rose by $7.1bn in 2017 —NBS

The National Bureau of Statistics (NBS) report has shown that the total capital importation into the country, comprising of both Foreign Direct Investments (FDI) and Foreign Portfolio Investments (FPI), more than doubled in 2017, surging by 138.7 per cent year-on-year (YoY) to $12.2 billion from $5.1 billion recorded in 2016.

NBS noted that the $7.1 billion rise was a pointer to the soaring confidence of foreign investors in the Nigerian economy.

This was stated by NBS in its Capital Importation report for fourth quarter 2017 (Q4’17) and Full Year 2017 (FY’17), on Thursday, adding that the increase was buoyed by the growing appetite of portfolio investors in Nigerian Securities.

“As at the end of 2017, total capital imported into Nigeria was $12.2 billion, an increase of $7.1 billion or 138.7 per cent from the figure recorded in 2016. The growth in Capital Importation in 2017 was mainly driven by increase in Portfolio Investment, which went up by $5.5 billion from the previous year to reach $7.3 billion in 2017, and accounting for 60 per cent of capital imported,” the report said.

In the Q4’17, foreign investment stood at $5.3 billion indicating 247.5 per cent (YoY) growth and 29.9 per cent quarterly growth. The report pointed that the main driver of capital importation in Q4’17 was FPI, otherwise called Hot Money.

The FPI grew by 1,123.5 per cent, that is 12 times, over the figure recorded in Q4’16, which was largely fostered by Money Market Instruments.

“Foreign Portfolio Investments (FPI) stood at $3.5 billion, representing a quarter-on-quarter (QoQ) growth of 25.7 percent.

“Year-on-year, FPI increased by 1,123.5 percent from $284.2 million in Q4’16. The increase was driven by a strong growth in Money Market Instruments, which recorded $2.2 billion, the first time since Q3‘13. “Money Market Instruments contributed 63 percent to FPIs. Equity which had been the main driver of Portfolio investments in previous quarters dropped by $942.9 million, from $1.9 billion in Q3‘17 to $989.2 million in Q4’17.

“On the other hand, bonds recorded an increase of $194.1 million, from $115.4 million in Q3‘17 to $309.5 million in Q4‘17 of the same year,” NBS report stated.

On the other hand, the NBS also hinted that FDI, which it refers to as ‘Cold Money’, recorded growth in Q4’17.

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It said, “In Q4’17, Foreign Direct Investment hit $378.4 million for the first time since Q4 2015 when it reported $123.2 million. This was a substantial increase of 221.8 per cent (QoQ) when compared to the Q3’17, and a 9.8 per cent (YoY) increase compared to Q4’16. The growth in FDI was mainly driven by Equity Investments, which contributed 99.8 per cent, while Other Capital Investment contributed 0.2 per cent.

“Other Investment accounted for 28.4 per cent of total capital importation in Q4’17. This category of capital importation grew 65.96 per cent (YoY), and by 21.2 per cent when compared to the previous quarter. The $1.5 billion recorded by Other Investment was mainly in the form of Loans, which was $1.1 billion in the fourth quarter (Q4’17), followed by Other Claims which recorded $425.7 million, and then Trade credits which reported $10million, having posted no inflows since Q4’16.”

 

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