Nigeria’s total capital importation rose significantly in the first quarter of 2024, increasing by 210.16% to $3.37 billion from $1.08 billion in Q4 2023, according to the National Bureau of Statistics (NBS) capital importation report.
The surge in capital importation was driven by a 600 basis points hike in the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN) and high returns in Federal Government of Nigeria (FGN) bonds and CBN Treasury bills during the period.
Portfolio Investment led the capital importation, accounting for 61.48% of the total, followed by Other Investments at 34.99%. Foreign Direct Investment was the smallest, with 3.53% of the total capital importation in Q1 2024.
The Banking sector received the highest inflow, constituting 61.24% of total capital imports, followed by the Trading sector at 14.66% and the Production/Manufacturing sector at 5.68%.
Lagos State was the top destination for capital importation, accounting for 82.42% of the total, followed by Abuja (FCT) at 17.58% and Ekiti State with a negligible amount.
Stanbic IBTC Bank Plc received the highest capital importation into Nigeria in Q1 2024, accounting for 37.24% of the total, followed by Citibank Nigeria Limited at 16.22% and Rand Merchant Bank Plc at 15.66%.
The significant increase in capital imports, particularly in portfolio investment, may have sucked up capital from the real economy into the financial sector, confirming the fears of players in the real economy following the interest rate increase by the CBN.
