The total value of capital imported in the first three months of 2018 (Q1) stood at $6,303.63 million, which represents a 594 percent increase (year- on–year) from $908.3 million in Q1 2017, according to National Bureau of Statistics (NBS).
The first quarter in 2018 saw a continuous growth in total capital importation into Nigeria, the fourth consecutive quarterly increase since Q2 2017. This increase in capital inflow in Q1, 2018 was driven mainly by Portfolio Investment, which grew from $3,477.53 million in the previous quarter to $4,565.09 million, accounting for 72.42 percent of the total capital importation during the quarter.
Capital importation can be divided into three main investment types: foreign direct investment (FDI), portfolio investment and other investments, each comprising various sub-categories. Since 2017 Q2, portfolio investment has been expanding faster than the other two categories, remaining the largest component of capital imported in Q1, 2018 at 35 percent of total capital imported.
Foreign direct investment and other investment accounted for 3.91 percent and 23.67 percent of total Capital Importation into Nigeria in the quarter under review.
Capital inflow in the form of Shares in the first quarter increased by 3.05 percent from $3.68 billion reported in Q4, 2017 to $3.79 billion in Q1, 2018. This component has recorded a steady rise since the first quarter of 2017, with Q1, 2018 being the fifth quarter of its consecutive rise. The percentage share of Shares investments to total Capital Imported however, decreased from 68.37 percent in the previous quarter to 60.17 percent in the first quarter of 2018.
In the first quarter of 2018, Banking remained the leading sector for foreign capital Inflow which attracted the most considerable amount of capital investment. During the first quarter, $1.18 billion overseas investment flowed to the Banking sector, which accounted for 18.7 percent’s of the total Capital Importation.
Financing exceeded production, servicing and telecoms sectors to become the second leading sector to receive capital investment, attracting $485.41 million during the quarter. This was followed by the Servicing sector with $328.15 million, Production sector with $144.09 million and Agriculture with $130.90 million.
These five economic sectors mentioned above together attracted more than 90 percent of foreign capital investment in the first quarter of 2018. Telecommunications, which ranked fourth in Q4, 2017, only had a total of $87.25 million foreign capital investment in the first quarter of 2018, declining by 54.32% from $191.01 million recorded in the last quarter.
Capital inflow to other sectors including drilling, electrical, marketing, oil and gas, and trading increased significantly compared to the fourth quarter of 2017, although the absolute values to these sectors remained
Also in the first quarter of 2018,Abuja remained the leading state to receive foreign capital inflow after it overtook Lagos in the fourth quarter of 2017,recording an amount of $3.54 billion. This was an increase of 32.24 percent from the figure recorded in the previous quarter, when it reported $2.68 billion.
At the same time, capital importation to Lagos increased marginally by 4.59 percent from $2.55 billion in the last quarter to $2.67 billion in Q1, 2018, while capital Importation to Akwa Ibom was $43.62 million, which is a decline of 65.05 percent from the figure reported last quarter ($124.85 million).
The United Kingdom kept its leading role in capital investment in Nigeria in the first quarter of 2018, with $2.25 billion capital invested in Nigeria. This inflow accounted for 35.73 percent of the total of capital inflow in Q1, 2018, it was also a 39.89 percent increase from the previous quarter and a growth of 644.55 percent over the corresponding period of last year.
The country to account for the second most significant value of capital importation was the United States. The US accounted for $1.26 billion in the first quarter of 2018 or 19.99 percent of the total quarterly capital importation.
The next two largest investors in the first quarter of 2018 were South Africa and Ghana, which recorded $493.22 million and $380.14 million capital inflow into Nigeria in the first quarter
Capital is imported through financial institutions into Nigeria. In the first quarter of 2018, the bank through which the highest share of capital flowed was Standard Chartered Bank. The amount of capital imported through Standard Chartered Bank accounted for 25.49% of the total foreign capital inflow (up from the 15.1 percent share recorded in the last quarter of 2017).
This was followed by Access Bank, Ecobank, Zenith Bank, Stanbic IBTC Bank and Guaranty Trust Bank, which accounted for 16.62%, 14.87%, 10.48%, 9.12% and 5.32% of the total capital importation in the first quarter of 2018 respectively. A total of 81.90% of the foreign capital in 2018 Q1 was imported through the six banks stated above.