Lagos jacks up Nigeria’s foreign capital inflow to $1.13bn

Nigeria’s economic hub, Lagos State received the largest share of the $1.13 billion foreign capital inflow into Nigeria in the first quarter of 2023, receiving $704 million, representing 62 percent of the total investment capital into the country.

According to the Nigeria Capital Importation Q1 2023 report by the Nigerian Bureau of Statistics, the Federal Capital Territory (FCT) followed, receiving $410 million, while Akwa Ibom, Adamawa, and Anambra complete the top five states that received $5.2 million, $4.5 million, and $4.0 million, respectively.

Analyzing foreign capital inflow by sector, the banking sector attracted the most foreign capital during the first quarter, receiving 26 per cent ($304 million) of the total foreign capital.

The production sector followed closely with 22.61 per cent ($256 million), and IT services received 19 per cent ($216 million). The finance sector recorded a capital inflow of $118 million, while trading received $91 million.

The telecoms sector received $22.5 million, and the transport sector attracted $12.94 million. Agriculture received a modest $4.84 million, while shares gained $88 million.

The oil and gas sectors, brewery, and electricals represented 0.07 per cent, 0.06 per cent, and 0.65 per cent of the total capital inflow, respectively.

Meanwhile, Nigeria’s total capital inflow for the first three months of the year stood at $1.13 billion- a drop of $441 million when compared to the corresponding quarter of 2022.

Capital importation for the first quarter of 2022 was $1.5 billion.

When compared to the fourth quarter of 2022, the capital inflow rose by 6.78 per cent from $1.06 billion.

During the first quarter, Nigeria received more capital investments from portfolio investments than from any other sector. The portfolio investments accounted for approximately $649 million, constituting 57.32 per cent of the total capital inflow.

Within the portfolio investments category, Nigeria received $301 million from bonds, $222 million from equities, and $125 million from money markets.

In addition to portfolio investments, Nigeria also attracted foreign capital through other sectors such as trade credits, loans, and currency deposits.

The United Kingdom emerged as the leading provider of capital inflow into Nigeria, contributing $673 million, which represents 59.47 per cent of the total capital inflow.

The United Arab Emirates followed with $108 million, while the United States of America provided $95 million. South Africa and Singapore contributed $91 million and $69 million, respectively.

Despite the decrease in total capital importation, the investments across sectors, countries, and banks provide insights into the trends and preferences shaping Nigeria’s economy in the first quarter of 2023.