Forex scarcity, others chase away investors as capital import drops to $6.7bn

Capital importation into Nigeria dropped to $6.7 billion in 2021 as foreign investors ran away from having their money trapped in Naira.

The amount recorded in 2021 is a 30.78 percent reduction when compared to $9.68bn recorded in 2020.

The National Bureau of Statistics (NBS) disclosed this in its latest report published on the Nigerian Capital Importation report for the four quarters of 2021.

Over the last few months, multinational companies operating in Nigeria have been facing difficulties repatriating their dollar profits as they watch the value depreciate daily.

On Monday at the commissioning of the Murtala Muhammed International Airport (MMIA) New terminal Minister of Aviation, Senator Hadi Sirika, revealed that foreign airlines’ trapped fund in Nigeria was about N117 billion ($283million).

MTN, Heineken BV, Nestle SA, Unilever Multichoice have also over the years, complained of the difficulties of getting dollars to send their profits home.

Meanwhile, breakdown of NBS data shows that for the first and second quarter of 2021, “The total value of capital importation into Nigeria declined to $875.62m in the second quarter of 2021 from $1.91bn in Q1, 2021.

“This represents a decrease of -54.06 percent compared to Q1 2021 and -32.38 per cent decrease compared to Q2 2020.

Types of Capital import 2021

The data shows Portfolio investment accounted for 62.97 per cent ($551.37m) of total capital importation, followed by Other Investment, which accounted for 28.13 per cent ($246.27m) of total capital imported and Foreign Direct Investment, which accounted for 8.90 per cent ( $77.97m) of total capital imported in Q2 2021.”

Read also: Naira drops in value despite reduced forex transactions

During the third quarter, capital importation stood at $1.73bn with the largest amount of capital importation by type begin PI which accounted for 70.30 per cent ($1.22bn), followed by other Investment which accounted for 23.47 per cent ($406.35m) and FDI which accounted for 6.23 per cent ($107.81m).

In the fourth quarter, the NBS added, “The total value of capital importation into Nigeria in Q4, 2021 stood at $2.19bn from $1.73m in the preceding quarter showing an increase of 26.35 per cent.

“When compared to the corresponding quarter of 2020, capital importation increased by 109.28 per cent from $1.05bn. The largest amount of capital importation by type was received through other investments, which accounted for 54.24 per cent ($1.19bn).

“This was followed by PI with 29.39 per cent ($642.87m) and FDI amounted to 16.38 per cent ($358.23m) of total capital imported in Q4 2021.”

According to the NBS, most of the capital imported into the nation was from Mauritius, United States of America, Republic of South Africa, and the United Kingdom.

Lagos state attracted most of the capital being imported into the nation.

In Q4, it attracted 90.66 percent; in Q3, it attracted 85.57 percent; in Q2, it attracted 89.09 per cent; and 82.81 per cent in Q1.

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