SAN FRANCISCO, December 23, (THEWILL) – Investment inflows to the Nigerian economy hit the bottommost point in five years as of third quarter of 2020 (Q3 ’20), data from the National Bureau of Statistics (NBS) has shown.
The statistics bureau in its quarterly Capital Importation report showed that a total of $1.46 billion investment inflows were recorded in Q3 ’20, representing the lowest figure since 2016 corresponding period.
Details of the NBS report showed that Nigeria’s total investment inflows rose from $1.82 billion in Q3 ’16 to $4.16 billion in Q3 ’17 — a climb of 43.75 per cent.
In Q3 ’18, transaction value dropped to $2.85 billion, and peaked 53.17 per cent to hit $5.36 billion in Q3 ’19 – the highest during the review period.
Aggregate inflows for the five-year period amount to $15.46 billion of which Q3 ’20 figure ($1.46 billion) account for 9.44 per cent.
Data mined by THEWILL revealed further that the inflow contraction virtually occurred in the three investment segments – Foreign Portfolio Investment (FPI), Foreign Direct Investment (FDI) and ‘Others’ categories.
The FPI $407.25 million inflow recorded in Q3 ’20 was a sharp drop from $2.99 billion in the corresponding period of 2019.
But FDI rose from $200.08 million in Q3 ’19 to $414.79 million in Q3’20
Further analysis showed that the largest inflows came through the others category with $639.44 million in Q3 ’20, a sharp decline from $2.16 billion recorded in the corresponding 2019 period.
“The largest amount of capital importation by type was received through Other investment, which accounted for 43.75 per cent ($639.44m) of total capital importation, followed by Foreign Direct Investment (FDI), which accounted for 28.38 per cent ($414.79m) of total capital imported and Portfolio Investment which accounted for 27.87 per cent ($407.25m) of total capital imported in Q3 2020”, the report stated.
By sector, capital importation by production dominated in Q3 ’20 reaching $400.09 million of the total capital importation in Q3 ’20.
The United Kingdom emerged as the top source of capital investment in Nigeria in Q3 ’20 with $594.65 million. This accounts for 40.69 per cent of the total capital inflows in Q3 ’20.
By Destination of Investment, Lagos state emerged as the top destination of capital investment in Nigeria in Q3 ’20 with $1.20 billion. This accounts for 82.71 per cent of the total capital inflow in Q3 ’20.
By Bank, Standard Chartered Bank Nigeria Limited emerged at the top of capital investment in Nigeria in Q3 ’20 with $438.98 million. This accounts for 30.04 per cent of the total capital inflow in Q3 ’20.
Analysts predict a significant rise in Q4 ’20 figures in view of increased tempo in stock market activities since the end of Q3 when investors ‘dumped’ the fixed income market.
Paul Uzum, Stockbroker at Planet Capital Limited, said that portfolio investors are taking position in readiness for the annual profit-taking when listed companies prepare to close their books for dividend declaration.
Investment expert, Mark Odom, however expressed concern over the renewed outbreak of Covid-19 pandemic in Europe, especially United Kingdom.
He told THEWILL that investment flows from UK are most likely to be hampered by the renewed outbreak of Covid-19 and the strict lockdown enforced by the government.
