Nigeria’s Capital Inflow Rises to $4.94 Billion

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At $4.94 billion in the fourth quarter of 2013, the aggregate foreign capital inflow into Nigeria increased by 24.3 per cent from $3.97 billion in the third quarter, a report has shown.
 
 
This was attributed to an increase in both direct and portfolio investment inflows.
 
Direct investment and portfolio investment inflows increased by 16.1 and 26.6 per cent from $0.86 billion and $3.11 billion in the third quarter of 2013 to $1 billion and $3.94 billion, respectively.
 
According to the Central Bank of Nigeria’s (CBN’s) external sector development report for the fourth quarter of 2013, portfolio investment inflow remained dominant and accounted for 79.7 per cent of total foreign inflows while direct investment inflows accounted for 20.3 per cent of the total.
 
“The higher inflow of foreign capital in Q4 2013 was a welcome development which should be sustained through macroe-conomic stability and enhanced investment environment including good corporate governance,” it added.
 
Available data revealed that total foreign exchange inflows to the economy in Q4 2013 stood at $35.34 billion as against the $38.49 billion recorded in Q3 2013. This indicated a decrease of 8.2 per cent. Inflows through the central bank decreased by 20.2 per cent from $11.86 billion in Q3 2013 to $9.47 billion in Q4 2013 while inflows through autonomous sources declined by 2.9 per cent to $25.88 billion.
 
Similarly, outflows in Q4 2013 decreased, by 13.1 per cent to $11.22 billion as against $12.91 billion in Q3 2013.
 
Consequently, a lower net inflow of $24.12 billion was recorded in Q4 2013 compared with $25.59 billion in Q3 2013, indicating a decline of 5.7 per cent.
 
“At $5.38 billion, the current account surplus was 47.5 and 9.3 per cent higher than the $3.65 billion and $4.93 billion recorded in Q3 2013 and Q4 2012, respectively.
 
 
“The development was largely traceable to the lower investment income repatriations as well as improved financial inflows (home remittances) from Nigerians in Diaspora,” it added.
 
Further analysis revealed that aggregate exports of goods declined by 3.6 per cent and accounted for by the oil and gas component.
On the other hand, non-oil exports increased by 21.3 per cent in Q4 2013 above the level in Q3 2013.
 
According to the report, “the improved performance of the non-oil exports may not be unconnected with the current policy emphasis on the promotion of non-oil commodity exports particularly output from commercial agriculture.
 
“Similarly, aggregate imports declined by 7.2 per cent. Out-payments in the services account increased by 9.9 per cent when compared with the level recorded in Q3 2013 while the deficit in the income account improved from $6.96 billion in Q3 2013 to $5.47 billion in Q4 2013.
 
 
“Current transfers surplus, which was driven largely by remittances from Nigerians in Diaspora, widened by 1.7 and 11.1 per cent to $6.06 billion in Q4 2013 when compared with the respective levels recorded in Q4 2012 and Q3 2013.”
 
Continuing, the report showed that transactions in the capital and financial account resulted in a net asset of $0.80 billion in Q4 2013 compared with a net liability of $7.06 billion in Q3 2013.
The development was driven by higher foreign currency deposits and outward direct investment of $0.95 billion in Q4 2013 compared with $0.21 billion in Q3 2013.
 
It added: “The growth in outward direct investment was attributable to the expansion of Nigerian banks in the sub-region. Outward portfolio invest-ment declined by 59.7 per cent to $0.87 billion but rose above the level in the corresponding quarter of 2012 by 25.0 per cent.”
 
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