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Stanbic IBTC @ $222.84m; Citibank Nigeria @ $190.03m; Zenith Bank @ $83.04m top recipient banks
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Lagos State @ $308.83m; FCT Abuja @ $194.66m top destination for foreign capital
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31 states post zero $ foreign capital in Q3’23
Business a.m reporter
Capital importation into Nigeria declined steeply by 36.45 percent to $654.65 million in the third quarter of 2023, from $1.03 billion in the second quarter of the year in review, according to recent data released by the National Bureau of Statistics (NBS).
The data showed that capital importation in the third quarter of 2022 was even higher, at $1.16 billion, which represents a 43.55 percent decline in Q3 2023 over the same period in 2022.
According to the “Nigeria Capital Importation Q3 2023” report, Lagos State was once again the top destination for foreign capital inflows, accounting for 47.18 percent of the total. The state attracted $308.83 million in foreign capital during the third quarter of 2023, reflecting its position as the most populous and economically vibrant state in Nigeria. The Federal Capital Territory (FCT) Abuja was the second-largest recipient of foreign capital in Q3 2023, with $194.66 million or 29.73 per cent of the total.
However, it was the category of “other investments” that accounted for the largest share of capital inflows, totalling $507.77 million or 77.56 percent of the total. This was followed by portfolio investment, which made up 13.31 per cent of the total.
Though the foreign direct investment (FDI) component of capital inflows was lower at $59.77 million or 9.13 percent, it was nonetheless an important source of financing for the Nigerian economy. The report also highlighted that while some states like Akwa Ibom and Ekiti received limited investments, 31 other states did not receive any foreign investments in Q3 2023.
The report showed that the production/manufacturing sector attracted the highest amount of foreign capital in Q3 2023, at $279.51 million or 42.70 percent of the total. This was followed by the financing sector, which attracted $127.93 million or 19.54 percent of total capital imports. The shares sector also received a significant amount of investment, at $85.49 million or 13.06 per cent of total inflows.
In terms of the origin of capital imports, the Netherlands was the leading source of foreign capital in Q3 2023, accounting for $175.62 million or 26.83 percent of total inflows. Singapore was the second-largest source of capital, at $79.15 million or 12.09 percent, followed by the United States.
Among the banks that received the highest levels of capital imports, Stanbic IBTC Bank Plc was the top recipient with $222.84 million or 34.04 percent of the total, followed by Citibank Nigeria Limited with $190.03 million or 29.03 percent and Zenith Bank Plc with $83.04 million or 12.68 percent.
While President Bola Tinubu’s administration has been perceived to be working hard to attract foreign capital into the country, the impact of this effort has yet to be felt in a meaningful way. The current foreign exchange (FX) crisis in Nigeria is seen as a major contributor to this situation, as it has had a significant impact on investor confidence.
Analysts believe that until the FX crisis is resolved, it will be difficult for Nigeria to attract the foreign investment it needs to spur economic growth and development.
