Foreign capital inflow to Nigeria last year fell by $576.61 million due to low investor confidence.
Capital importation report for the 2014 fiscal year released by the National Bureau of Statistics (NBS) showed that foreign investment dropped from $21.31 billion (N4.21 trillion) in 2013 to $20.75 billion (about N4.1 trillion) in 2014, a 2.6 per cent decline.
The report compared inflows in the last quarters of both years and pointed out the sharp drop in the final quarter (Q4) of 2014, which it blamed on the build-up to the 2015 elections.
The economy attracted $4.49 billion investment in Q4, a decline of $2.04 billion or 31.22 per cent from $6.54 billion in the third quarter.
“Capital worth a total $4.49 billion was imported to Nigeria in the fourth quarter of 2014, bucking the upward trend that had been observed throughout the preceding quarters of 2014,” the report said.
“A sharp decline of $2.04 billion or 31.22 per cent was recorded from the value of $6.54 billion that was recorded in the preceding quarter, which represented the peak value for the year.
“Despite this, the closing quarter of the year 2014 was still greater than the $3.90 billion of capital imported in the opening quarter, by $595.18 million or 15.24 per cent.
“Total capital imported in the year 2014 summed to $20.75 billion, lower by $576.61 million or 2.66 per cent from the $21.31 billion that was imported in 2013.”
NBS categorised investment inflows into three broad segments of Portfolio Investment, Foreign Direct Investment (FDI), and others.
Portfolio investment, which made up the largest portion of the capital imported, had the worst drop, driven by declines in the value of equities.
In Q4, portfolio investment dropped by $3.12 billion or 60.94 per cent to $2.0 billion from its Q3 value of $7.12 billion.
Equities decline accounted for 59.10 per cent. From $3.8 billion in Q3, it dropped by $2.22 billion to $1.54 billion in Q4.
However, FDI increased by $224.35 million or 41.2 per cent, from $544.50 million in Q3 of 2014 to $768.86 million in Q4.
With $1.94 billion imported in Q4 of 2014, or 43.21 per cent of the total, the United Kingdom remains the source of the greatest FDI.
Marginal declines were observed in the United States, Nigeria’s second largest source of capital, declining by $54.62 million or 4.84 per cent to $1.07 billion in Q4.
