In a recent interview, we explored the latest trends in capital importation in Nigeria, focusing specifically on the second quarter of 2024. The discussion revealed a marked interest from portfolio investors, with inflows soaring over 1,200 percent year-on-year. However, overall capital importation saw a decline of 22.85 percent compared to the first quarter of 2024.

According to the National Bureau of Statistics (NBS), total capital importation fell from $3.37 billion in Q1 to $2.60 billion in Q2. This decline is noteworthy when compared to the previous year, as capital importation surged by an impressive 152.8 percent from $1.03 billion to $3.37 billion during the same period.

When we broke down the figures, it became clear that portfolio investments led the way, accounting for $1.40 billion, or 53.93 percent of the total inflows. Other investments also played a significant role with $1.169 billion, representing 44.92 percent of the total. It was interesting to note that most of these “other investments” were predominantly loans and claims, which amounted to $1.15 billion—essentially the entirety of that category—while foreign claims received a more modest $16 million.

Digging deeper, we found that money market instruments attracted $1.07 billion, making up 76.6 percent of foreign portfolio investment in Q2. However, there was a significant drop in foreign capital inflows to both bonds and money market instruments, with bond investments declining by 57.75 percent and money market investments dropping by 32.92 percent.

Foreign Direct Investment (FDI) remained particularly low, contributing only $29.83 million, or 1.15 percent of total capital imports in Q2. The NBS pointed out that total capital importation reached $2.60 billion for this period, which is substantially higher than the $1.03 billion from the previous year, but down from $3.38 billion in Q1 2024.

Looking at sector performance, the banking sector received the highest capital inflow at $1.12 billion, making up 43.15 percent of total capital importation. The manufacturing sector followed with $624.71 million, while the trading sector contributed $569.22 million.

Geographically, the bulk of these funds originated from the United Kingdom, which contributed $1.12 billion (43.01 percent), followed by the Netherlands at $577.82 million (22.19 percent) and South Africa at $255.98 million (9.83 percent).

On a state-level analysis, Lagos emerged as the top destination for capital importation, with $1.37 billion, representing 52.52 percent of the total. Abuja (FCT) accounted for $1.24 billion (47.48 percent), while Ekiti state had a negligible contribution of just $0.0003 million.

Finally, we noted that Citibank Nigeria Limited received the highest capital inflow at $818.46 million (31.43 percent), followed by Standard Chartered Bank Nigeria Limited with $654.79 million (25.14 percent), and Rand Merchant Bank Plc at $488.59 million (18.76 percent). This data illustrates a complicated investment landscape as Nigeria continues to navigate through challenging economic conditions.