An analysis of Capital Importation data in the first half since 2017 shows that Nigerian outlets of global banking majors have been a conduit for no less than 70 percent of imported funds, leaving 21 local peers scrambling for the rest. Data shows an average of 78 percent in three years.
The overseas- based lenders enjoy the international presence of their parent companies and can easily tap into their group’s balance sheet and expertise to edge out local players. Also, foreign lenders usually offer more attractive terms of credit and fees.
This on the part of domestic players highlight the low global presence of Nigerian brands, inadequate knowledge in global investment and deal structuring, and a relatively less robust balance sheet, among others, experts say.
For instance, a South African foreign investor who wants to borrow fund to invest in Nigeria would find it easier approaching a Standard Chartered Bank which has Stanbic-ibtc Holdings as its Nigerian Subsidiary for all or some of the above-stated reasons.
Otherwise, the foreign investor would have to meet local lenders who might even need to form a consortium in other to raise the necessary fund.
The Capital importation data published quarterly by the National Bureau of Statistics (NBS) shows how many foreign funds come into the country, by type, by sector as well as the financial institution serving as channels.
In the mid-year periods, Nigeria banks have been accounted for less than 30 percent of total capital inflows; in 2017, 27 percent was channeled through local banks then it dipped to 17 percent in 2018 then rebounded to 22 percent in 2019.
In monetary terms, Nigerian banks have floated $5.9 billion in the last three half-year periods while the Foreign based lenders flowed in $ 22.9 billion or about four times more than their domestic counterpart.
Stanbic IBTC Holdings has in the last three years remained dominant with 42 percent of the $ 28.8 billion total capital importation in the period facilitated through the bank.
In the second place, Standard Chartered Bank Nigeria Limited has accounted for 12.86 percent or $3.71billion while Citibank Nigerian Limited, with group head in New York has seen 11.81 percent flow through in the review period.
The other three foreign lenders are Rand Merchant Bank, a South-african lender (9.29%), and Ecobank Transnational Incorporated Nigeria, with head office in Lome, Togo (3.41%).
On the other hand, Nigerian tier-one lender Access Bank accounts for 5.19 percent or $1.497 billion while United Bank for Africa (UBA) accounts for 2.32 percent which is $669 million.
Zenith Bank floated in 3.97 percent or $1.1 billion, Guaranty Trust Bank (GTB) 1.9 percent or $547 million and First Bank of Nigeria Holdings (FBNH) floated in 2.1 percent or about $605 million.
