Nigeria’s capital importation reached an impressive $2.60 billion in the second quarter of 2024, reflecting a significant 152.81% increase from $1.03 billion in Q2 2023, as per the latest report from the National Bureau of Statistics (NBS). Released on October 8, 2024, the report highlights a mixed landscape for foreign investment in Nigeria.

Despite this remarkable annual growth, the figure marks a 22.85% decline from the $3.38 billion recorded in the first quarter of 2024. This decline underscores ongoing fluctuations in investor sentiment, which are influenced by global economic uncertainties and various domestic challenges.

According to the report, “In Q2 2024, total capital importation into Nigeria stood at $2,604.50 million, higher than the $1,030.21 million recorded in Q2 2023, indicating an increase of 152.81%. In comparison to the preceding quarter, capital importation declined by 22.85% from $3,376.01 million in Q1 2024.”

The primary driver of capital inflows during this period was portfolio investments, contributing $1.40 billion, or 53.93% of the total. These investments typically involve foreign investors placing funds in Nigeria’s stocks, bonds, and other financial instruments for quicker returns. Other investments, encompassing loans, trade credits, and various forms of debt financing, totaled $1.17 billion, representing 44.92% of the overall inflows. However, Foreign Direct Investment (FDI) lagged significantly, accounting for just $29.83 million, or a mere 1.15% of total inflows.

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This trend reflects a persistent challenge for Nigeria in attracting long-term capital necessary for sustainable economic growth and job creation. The banking sector emerged as the largest beneficiary of capital importation, receiving $1.12 billion, which represents 43.15% of total inflows for the quarter. This dominance highlights the crucial role of banks in facilitating foreign investments and providing access to Nigeria’s financial markets.

In addition, the production and manufacturing sector attracted $624.71 million, constituting 23.99% of total capital importation, suggesting a positive outlook for industrial activities. The trading sector also reported significant capital inflows of $569.22 million (21.86%), reflecting the resilience of trade activities within the country.

Geographically, Lagos State continued to be the leading destination for capital importation, attracting $1.37 billion, or 52.52% of total inflows. Its robust infrastructure and dynamic business environment solidify its position as Nigeria’s commercial hub. Abuja (FCT) followed closely with $1.24 billion, accounting for 47.48% of total inflows. In contrast, Ekiti State saw minimal capital inflows, recording only $0.0003 million during the quarter.

The report also noted the origins of these capital inflows. The United Kingdom was the largest contributor, with investments totaling $1.12 billion (43.01% of overall capital importation), reinforcing its status as a key partner in Nigeria’s financial landscape. The Netherlands ranked second with $577.82 million (22.19%), while South Africa came in third with $255.98 million (9.83%).

Among banks, Citibank Nigeria Limited led the way with $818.46 million, representing 31.43% of total inflows. Standard Chartered Bank Nigeria Limited followed closely with $654.79 million (25.14%), while Rand Merchant Bank Plc garnered $488.59 million (18.76%).