ACCORDING to the National Bureau of Statistics (NBS), capital inflow into Nigeria decreased by 28.09 percent to $1.573 billion in the first quarter of fiscal year 2022, compared to the previous quarter, due to the pre-election year uncertainties .
In the face of mounting FX backlogs, foreign investors are concerned about Nigeria’s macroeconomic dynamics, particularly the Central Bank of Nigeria’s (CBN) multi-tiered foreign exchange rate. Meanwhile, the Naira continues to be impacted by low foreign currency inflows, as the local currency is under pressure from demand for dollars and other major currencies.
According to the National Bureau of Statistics, capital importation fell 17.46 percent in the first quarter of 2022 compared to the same period in 2021, reaching US$1,905.89 million. However, portfolio investment got the most capital importation by category, accounting for 60.87 percent of total capital importation, or $957.58 million.
Other Investment accounted for 29.28 percent of total capital imported in Q1-2022, or US$460.59 million, while Foreign Direct Investment (FDI) according to NBS accounted for 9.85 percent of total capital imported in Q1-2022, or $154.97 million.
Lagos, the country’s commercial metropolis, received over two-thirds of the inflows. Dollar shortages are putting pressure on the exchange rate in Africa’s largest economy and major oil producer.
Capital importation into banking had the largest inflow of US$818.84 million in the first quarter of 2022, accounting for 52.05 percent of all capital imported. Money imported into the production sector, valued at US$223.67 million (14.22 percent), was followed by capital imported into the financing sector, valued at US$199.37 million (14.22 percent) (12.67 percent )
With a value of US$1.021.21 million, the United Kingdom was the leading source of capital imported into Nigeria in the first quarter of 2022, accounting for 64.92 percent. The Republic of South Africa and the United States of America came in second and third, with respective values of US$117.50 million (7.47 percent) and US$82.07 million (5.22 percent).
