Capital Importation Drops 73% to $230m in 2023 – Report
Capital imported into Nigeria fell month-on-month (MoM) by 73 percent to $230 million in July 2023 from $390 million in June 2023.
The Central Bank of Nigeria, CBN, disclosed this in its Monthly Economic Report for July noting that the development occurred amidst rise in interest rates in advanced economies which made their markets attractive.
Similarly, capital outflow declined MoM by 67 percent to $220 million in July from $670 million in June.
According to CBN, this was partly due to lower loans, dividend repatriation, and capital reversal.
The apex bank also said that by nature of business, investment in financing had the highest contribution, accounting for 48 per of the total capital inflow during the period.
Giving further insight CBN said: “Analysis based on investment categories revealed that other investment capital, primarily in the form of loans and foreign direct investment as a percent of total, were 88.3, 8.0 and 3.7 per cent valued at $0.20 billion, $0.02 billion and $0.01 billion, respectively.
“By nature of business, investment in financing accounted for 48.1 percent of the total inflow, production/manufacturing, (31.2 percent);telecommunications,(8.7 percent);shares, (6.8 percent);banking (3.7 percent), and other sectors accounted for the balance(1.5 percent).
“By destination, the Federal Capital Territory and Lagos state were the main recipients of capital inflow, with shares of 63.8 and 36.2 per cent, respectively.”
On capital outflow from the economy, CBN said: “Capital outflow from the domestic economy declined significantly in July 2023, partly on account of lower loans, dividend repatriation, and capital reversal.
“In July 2023, capital outflow at $0.22 billion fell by 67.0 per cent, compared with $0.67 billion in the preceding month.
“Outflow in the form of loans declined to $0.12billion, from $0.33 billion in June 2023, while, outflow in the form of capital reversal declined to $0.08 billion from $0.15 billion.
“There was also a decline in repatriation of dividends to $0.02 billion, from $0.19 billion in the preceding month.
“Of the total capital outflow, loans accounted for 52.4 per cent, capital reversals; 37.4 per cent, dividends; 10.2 per cent, while others accounted for the balance.”
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