Capital import reduces 73% MoM
By Jeph Ajobaju, Chief Copy Editor
Capital import dipped 73 per cent month-on-month (MoM) from $390 million in June to $230 million in July, as seen in the Central Bank of Nigeria (CBN) Monthly Economic Report for July just released.
The apex bank attributed the drop partly to the rise in interest rates in the developed economies which made their markets more attractive.
Capital outflow reduced 67 per cent MoM from $670 million in June to $220 million in July, partly due to lower loans, dividend repatriation, and capital reversal.
Investment in financing had the highest contribution to capital inflow, accounting for 48 per of the total, the CBN disclosed.
Investment categories
“Analysis based on investment categories revealed that other investment capital, primarily in the form of loans and foreign direct investment as a percent of total, were 88.3, 8.0 and 3.7 per cent valued at $0.20 billion, $0.02 billion and $0.01 billion, respectively,” the CBN explained.
“By nature of business, investment in financing accounted for 48.1 percent of the total inflow, production/manufacturing (31.2 percent); telecommunications (8.7 percent); shares (6.8 percent); banking (3.7 percent), and other sectors accounted for the balance (1.5 percent).
“By destination, the Federal Capital Territory and Lagos State were the main recipients of capital inflow, with shares of 63.8 and 36.2 per cent, respectively.”
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Capital outflow
“Capital outflow from the domestic economy declined significantly in July 2023, partly on account of lower loans, dividend repatriation, and capital reversal,” the CBN added, Vanguard.
“In July 2023, capital outflow at $0.22 billion fell by 67.0 per cent, compared with $0.67 billion in the preceding month.
“Outflow in the form of loans declined to $0.12 billion, from $0.33 billion in June 2023, while outflow in the form of capital reversal declined to $0.08 billion from $0.15 billion.
“There was also a decline in repatriation of dividends to $0.02 billion, from $0.19 billion in the preceding month.
“Of the total capital outflow, loans accounted for 52.4 per cent, capital reversals 37.4 per cent; dividends 10.2 per cent; while others accounted for the balance.”