According to a report by the National Bureau of Statistics (NBS), the total capital importation into Nigeria in Q1 2023 indicates a decrease of 28.00% from the $1,573.14 million recorded during the same review period in 2022.
The report further showed Portfolio management accounted for 57.32%, the highest source of the total capital importation during the period with $649.28 million. Other Investments accounted for 38.31% of total capital importation at $435.76 million while Foreign Direct Investment (FDI) accounted for 4.20% at $47.60 million.
Experts have identified a link between foreign capital flow (FCF) and economic growth.
Foreign capital inflow is a means of augmenting funds for domestic investment. Most African countries and other emerging economies have used this method of financial inflow to increase savings and bridge the gap in foreign exchange.
When the different sectors of the economy were separated, the banking sector recorded the highest inflow of $304.56 million, accounting for 26.89% of total capital import in Q1 2023. The Production sector came behind as it recorded $256.12 million (22.61%), in capital importation while IT Services followed with $216.06 million (19.08%).
When Capital Importation was segregated by country of origin, it was revealed that the United Kingdom led other countries as it accounted for 59.47% of total capital importation, about $673.64 million recorded in Q1 2023. The United Arab Emirates and the United States with capital importation valued at $108.28 million (9.56%) and $95.36 million (8.42%) followed behind respectively.
Comparing states that received the highest capital importation, Lagos state remained the top destination in Q1 2023 with $704.87 million, accounting for 62.23% of total capital investment in Nigeria.
28 states did not attract any capital inflows during the period while only Lagos, Abuja, Adamawa, Akwa Ibom, Anambra, Ekiti, Ogun, Ondo, and Niger witnessed capital inflows.