RipplesMetrics : In four years, Uk dominates Nigeria’s capital importation, data show

In a recent National Bureau of Statistics (NBS) report, Nigeria’s capital importation for the first quarter of 2023 rose to $1.3 billion. This is 6.8 per cent higher than the $1.1 billion reported in the fourth quarter of 2022.

A closer look at the data shows that, between January and March, 59.5 per cent of the importation originated from the United Kingdom. This development has been sustained in the last four years.

RipplesMetrics checks showed that a total of $46.8 billion has been generated from capital importation between 2019 and the first quarter of 2023. Of this amount, about 44.7 percent of importation came from the United Kingdom.

This amounts to a total of $20.9 billion gotten through the UK.

The development might not be unconnected to the close tie between Nigeria and the United Kingdom in trading and investment.

In November 2022, the federal ministry of industry, trade and Investment signed a memorandum of understanding with the United Kingdom to enhance trade and investment relations. The MOU, signed under the UK-Nigeria Economics Development Forum (EDF), served as a platform to address market access barriers and respond to opportunities and challenges of doing business while boosting bilateral trade and investment in both countries.

Data on UK investment

According to NBS data, Nigeria had a total of $24 billion in capital importation in 2019 but $11 billion in importation from the UK.

In 2020, importation from the Uk was $4.2 billion of the total of $9.7 billion generated. Also, a total of $6.7 billion and $5.3 billion were generated in 2021 and 2022 respectively.

However, $2.3 billion and $2.8 billion in importation were from the UK in the same respective years.

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In 2023, capital Importation by country of origin reveals that capital from the United Kingdom ranked top in Q1 2023 with $673.64 million, accounting for 59.47%. This was followed by the United Arab Emirates and the United States valued at $108.28 million (9.56%) and $95.36 million (8.42%) respectively.

Capital importation in Q1 2023

According to NBS, the largest capital importation during the period was received from Portfolio Investment, which accounted for 57.32% ($649.28 million). It was followed by Other Investments with 38.31% ($435.76 million) and Foreign Direct Investment (FDI) with 4.20% ($47.60 million).

By Sectors, capital importation into the banking sector recorded the highest inflow of $304.56 million, representing 26.89% of total capital imported in Q1 2023. It was followed by capital imported into the production sector, valued at $256.12 million (22.61%), and IT Services with $216.06 million (19.08%).

Also, by Destination of Investment, Lagos state remained the top destination in Q1 2023 with $704.87 million, accounting for 62.23% of total capital investment in Nigeria. This was followed by Abuja (FCT), valued at $410.27 million (36.22%).

While by banks, the data showed that Citibank Nigeria Limited ranked top in Q1 2023 with $424.13 million (37.45%). It was followed by Standard Chartered Bank Nigeria Limited with $360.33 million (31.81%) and Stanbic IBTC Bank with $151.85 (13.41%).

Meanwhile, the data showed that in the last four years, Nigeria’s capital importation has consistently declined. This reduction might be due to several economic challenges the country had faced including recession, a global pandemic and instability in oil importation among several other fiscal policies which had stiffened external investors.

Also, when compared, the capital importation for Q1 2023 is lower than the $1,573.14 million recorded in Q1 2022, indicating a decrease of 28.00%.

This development places many expectations from the new administration, headed by President Bola Ahmed Tinubu, who in his inaugural address hopes to remodel the economy, increasing the Gross Domestic Product rate and attracting a lot of foreign investment.

By James Odunayo

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