Nigeria’s capital importation has fallen to a year-on-year growth rate of 22.85% in the second quarter of 2024.
This data comes from the latest capital importation report published by the National Bureau of Statistics on Tuesday.
However, while this represents significant annual growth, the report also reveals a quarter-on-quarter decline of 22.85%, dropping from the $3.38 billion recorded in the first quarter of 2024.
This reduction reflects fluctuations in investor confidence, underscored by persistent global economic uncertainties and domestic challenges within Nigeria.
The report stated, “In Q2 2024, total capital importation into Nigeria stood at US$2,604.50 million, higher than US$1,030.21 million recorded in Q2 2023, indicating an increase of 152.81%. In comparison to the preceding quarter, capital importation declined by 22.85% from US$3,376.01 million in Q1 2024.”
Portfolio investments were identified as the leading contributor to the capital inflows, accounting for $1.40 billion, or 53.93% of the total.
These types of investments typically involve foreign investors directing capital into Nigeria’s financial instruments—such as stocks, bonds, and other securities—seeking relatively short-term returns.
Other investments followed closely, with loans, trade credits, and other debt financing mechanisms contributing $1.17 billion, which represented 44.92% of the total.
Meanwhile, Foreign Direct Investment continued to lag significantly behind, attracting only $29.83 million—just 1.15% of the overall inflows.
This disparity underscores Nigeria’s ongoing struggle to secure long-term investments that could fuel sustained economic growth and generate employment opportunities.
The banking sector emerged as the largest recipient of capital importation during the period, drawing in $1.12 billion, which made up 43.15% of total inflows.
The dominance of this sector highlights its critical role as a gateway for foreign capital, facilitating greater access to Nigeria’s financial ecosystem.
In addition to the banking industry, the production and manufacturing sector received substantial attention, attracting $624.71 million, or 23.99% of the total.
This level of investment suggests growing optimism about Nigeria’s industrial activities and hints at a gradual recovery of its manufacturing sector, which has faced numerous challenges in recent years.
The trading sector also enjoyed significant capital inflows during the quarter, bringing in $569.22 million, or 21.86% of the total, which showcases the sector’s resilience and its importance in Nigeria’s overall economic activity.
Geographically, Lagos State retained its position as the top destination for capital importation, receiving $1.37 billion, or 52.52% of the total inflows.
As Nigeria’s economic powerhouse, Lagos continues to attract substantial foreign investment thanks to its developed infrastructure and vibrant business climate.
Abuja, the Federal Capital Territory (FCT), followed closely behind Lagos, securing $1.24 billion in capital inflows, representing 47.48% of the total.
On the other hand, Ekiti State recorded minimal inflows of just $0.0003 million, underscoring the concentration of investments in the country’s more established economic centers.
Regarding the origins of these investments, the United Kingdom stood out as the largest source, contributing $1.12 billion, or 43.01% of total inflows, affirming its key role as a long-standing financial partner to Nigeria.
The Netherlands came in second, with $577.82 million (22.19%), while the Republic of South Africa contributed $255.98 million (9.83%), securing third place.
Among banks facilitating these capital imports, Citibank Nigeria Limited led the way, processing $818.46 million, which accounted for 31.43% of total inflows.
Standard Chartered Bank Nigeria Limited followed with $654.79 million, representing 25.14%, while Rand Merchant Bank Plc handled $488.59 million, or 18.76% of the total.
This quarter’s report presents a mixed picture, with impressive annual growth but a short-term decline in capital importation, suggesting that investor confidence remains sensitive to both domestic and global conditions.
