Foreign capital inflow rises, along with portfolio investment
By Jeph Ajobaju, Chief Copy Editor
Foreign capital inflow rose 60 per cent year-on-year (YoY) to $610 million in January 2022 against $380 million in January 2021 but capital outflow ratcheted up 163 per cent from $110 million in January 2021 to $290 million in January 2022.
Data released by the Central Bank of Nigeria (CBN) in its Economic Report for January 2022, which contains the figures, also shows that portfolio investment (mainly money market instruments) rose 390 per cent from $10 million in January 2021 to $400 million in January 2022.
Other investments (mainly loans) slashed 43 per cent YoY from $290 million in January 2021 to $170 million in January 2022.
Foreign Direct Investment (FDI) fell 33 per cent from $60 million to $40 million.
Capital inflow month-on-month (MoM) was down 45 per cent in January 2022 versus $1.11 billion in December 2021.
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Net forex inflow drops to $950m
The CBN attributed the decline in capital inflow to tighter global financial conditions, driven by anticipated hikes in fund rates in the United States, per Vanguard.
The same report shows that net foreign exchange (forex) inflow dropped 62 per cent to $950 million in January 2022 from $2.5 billion in January 2021.
The CBN said it sold $720 million forex through the Investors and Exporters (I&E) and Small and Medium Enterprises (SMEs) windows and that forex inflow dipped 20.3 per cent to $4.36 billion in January 2022 from $5.47 billion in January 2021.
Forex outflow rose 14.8 per cent from $2.97 billion in January 2021 to $3.41 billion in January 2022.
Forex inflow through the CBN jumped 5.2 per cent from $1.73 billion in January 2021 to $1.82 billion in January 2022.
Forex outflow through the CBN reduced 8.1 per cent from $2.83 billion in January 2021 to $2.6 billion in January 2022.
“The economy recorded lower net foreign exchange inflow in January, driven, mainly, by net flows from the CBN and autonomous sources,” the CBN explained.
“Aggregate foreign exchange inflow into the economy declined by 36.7 per cent to $4.36 billion in January 2022, from $6.89 billion in December 2021.
“The total foreign exchange outflow decreased by 5.1 per cent to $3.41 billion from $3.59 billion in the preceding period.
“A net inflow of $0.95 billion was recorded in the month under review, compared with net inflow of $3.29 billion in the preceding period.”
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