Foreign capital imported to Nigeria declined by 32% from US$5.6 billion to US$3.8 billion between Q3 and Q4 2019, indicating a decline for the third consecutive quarter1. The decline during the period was driven by a fall in two components of foreign capital imports as portfolio investment and other investment declined by 37.7% and 30.5% respectively, while foreign direct investment increased by 24.5%. In 2019, the United Kingdom, the United States, and South Africa emerged as the top-three countries importing the highest capital while Lagos and Abuja remain the top destinations within the country. By sector, banking (31.92%), financing (26.18%) and shares (22.24%) emerge as the top sectors. Despite the decline in capital imports between Q3 and Q4 2019, there has been a 42.7% increase in the total value of capital imported between 2018 and 2019. Taking into consideration the impact of the COVID-19 pandemic on the global economy due to the decline in demand and widespread uncertainty, a further decline in foreign capital inflows is expected going forward.
March 30, 2020
Nigeria Economic Update (Issue 11)
African countries have been left out of the recent benefits accruing from international trade. For example, they accounted for only 3.2 percent of world trade in 2013 compared to 5 percent in the mid-1960s. Regional integration can reverse this weak performance as it holds the promise for countries to gain from the resultant economies of scale and enhanced competitiveness. It will also help to expand the markets for foreign direct investment.