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Out of the 36 states if Nigeria and the Federal Capital Territory FCT), only Kogi, Lagos, Abuja, Anambra, and Ekiti States recorded capital inflows in the second quarter of 2022.
This is contained in a Foreign Direct Investment data released by Nigeria’s National Bureau of Statistics, NBS on Wednesday, a copy of which was made available to TheNewsGuru (TNG).
The data means that 32 states failed to attract capital importation in the second quarter of 2022.
The states that Cumulative capital inflows totalled $1.54bn with Lagos having the Lion Share of $1.05bn within the period under review, and is followed by Abuja at $453.95m; Anambra at $24.71m, Kogi at $2m, and Ekiti at $500,000.
TNG reports that only six states, including Abuja, Anambra, Katsina, Lagos, Oyo, and Plateau attracted a total of $1.57bn as capital importation in the first quarter.
For the ‘Nigerian Capital Importation’ report for Q2, 2022, the nation’s statistics body said, “The total value of capital importation into Nigeria in the second quarter of 2022 stood at $1.54bn from $875.62m in the corresponding quarter of 2021, showing an increase of 75.34 per cent.
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“When compared to the preceding quarter, capital importation decreased by 2.40 per cent from $1.57bn. The largest amount of capital importation was received through Portfolio Investment, which accounted for 49.33 per cent ($757.32m). This was followed by Other Investment with 41.09 per cent ($630.87m) and Foreign Direct Investment accounted for 9.58 per cent ($147.16m) of total capital imported in Q2 2022.
“Disaggregated by Sectors, capital importation into banking had the highest inflow of $646.36m amounting to 42.10 per cent of total capital imported in the second quarter of 2022. This was followed by capital imported into the production sector, valued at $233.99m (15.24m), and the financing sector with $197.31m (12.85 per cent).”
Generally, capital importation into the nation has been on a steady decline.
The United Kingdom ($781.05m) was the largest source of capital importation, followed by Singapore and the Republic of South Africa which brought in $138.58m and $122.26m respectively.
“One thing about investment is that it is crisis shy. Investment doesn’t go to places where there are crisis. Why? Because investors want stability and predictability of their investments, particularly, having returns on their investments,” said an analyst.
“When an economy is witnessing what we are witnessing currently, despite the investment potential of that kind of economy, investors will wait and see whether the factors that can guarantee predictable and sustainable investments will finally be available.”
The Co-Managing Partner and Chief Executive Officer, Comercio Partners Asset Management, Tosin Oshunkoya, recently said foreign investors’ attraction to the Nigerian economy was waning.
He said, “The ravaging trend of inflation across major developed economies has triggered hawkish policy responses such as interest rate hikes, which tend to spur capital repatriation from frontier economies such as Nigeria while discouraging foreign capital inflows into the local economy, particularly through foreign portfolio investments.”
Also, the impact of global headwinds does not entirely absolve the local economy of blame, as persistent tightness in the currency market and unabated insecurity remained a fundamental threat to foreign investors in the review quarter.