Foreign loans soar 19%, capital outflow shrinks 8.8%
By Jeph Ajobaju, Chief Copy Editor
Nigeria’s foreign loans drove up capital importation to $330 million in January, a 19 per cent rise month-on-month (MoM) above $280 million in December 2023, according to newly released Central Bank of Nigeria (CBN) Monthly Economic Report for January 2024.
The CBN acknowledged that “higher inflow of loans boosted foreign capital inflow in the review month.”
The report explained how “New investments to the economy increased by 17.9 per cent to $0.33 billion, from $0.28 billion December 2023.
“Portfolio investment inflow increased by 9.1 per cent to $0.12 billion, from $0.11 billion, due, largely, to higher purchase of money market instruments.
“Similarly, foreign direct investment inflow increased to $0.03 billion, from the level in the preceding month.
“Other investment capital, mainly in the form of loans, also rose by 12.5 per cent to $0.18 billion, from $0.16 billion in the preceding period.
“In terms of share, inflow of other investment capital (mainly loans) constituted 55.1per cent, while foreign portfolio investment and foreign direct investment accounted for 34.8 and 10.1 per cent, respectively.”
The CBN said investment in production/manufacturing accounted for the highest contribution to capital importation by 28.2 per cent followed by telecommunication (23.4 per cent) and banking (22.6 per cent).
The CBN added capital inflow by originating country showed the United Kingdom as the major source of capital in January, contributing 26.6 per cent and followed by Singapore with 16.1 per cent.
Lagos at 67 per cent and the Federal Capital Territory (FCT) at 33 per cent were the highest recipients.
Capital outflow shrinks 8.8%
Capital outflow fell 8.8 per cent to $310 million due to a decline in loan repayment and repatriation of dividend.
“Capital outflow from the domestic economy moderated, due to lower loan repayment and repatriation of dividends.
“Capital outflow fell by 8.8 per cent to $0.31 billion in January 2024, from $0.34 billion in the preceding month.
“Repatriation of dividends decreased by 50 per cent to $0.01 billion, while loan repayment fell by 10 per cent to $0.18 billion.
“Similarly, capital reversals decreased by 23 per cent to $0.10 billion.
“In terms of share in total outflow, loans constituted 66.2 per cent, followed by capital reversal and dividends at 31.6 and 2.0 per cent, respectively.
“Other forms of outflow accounted for the balance.”
__________________________________________________________________
Related articles:
More multinational firms set to quit Nigeria this year, report says
15 multinational firms quit Nigeria in 3 years
Dependence on foreign ships costs Nigeria $1tr yearly
America plans AGOA expansion to all Africa, extension to 2041
__________________________________________________________________