Investment inflows into Nigeria fell to a three-year low in the second quarter of the year, as the fall out of the global pandemic and a huge drop in oil price and production, heightened economic uncertainties in Africa’s most populous country.
Total investments into Nigeria in Q2’20, including portfolio investments, foreign direct investment and equity investments, plunged to $1.29 billion, the National Bureau of Statistics, NBS, said in its capital importation report released Friday.
That’s a 77.88 per cent decline from the $5.85 billion inflows recorded in the preceding quarter and a 78.80 per cent drop from what was seen in the same period the previous year.
It is also the lowest inflows since Q’1 2017 when Africa’s biggest economy suffered a lengthy recession owing to a global collapse in oil prices and a restiveness in the Niger Delta region that sent oil production to lower lows. At that time, the country only managed to attract $900 million worth of inflows.
As expected, the biggest drop in the Q’2 2020 capital importation data was seen in foreign portfolio inflows.
Hot money(FPI) declined by 91.06 per cent and 91.14 per cent to $385 million from the high of $4.31 billion dollars and $4.34 billion recorded in the preceding quarter and in Q’2 2019 respectively.
Portfolio Investors sentiment were dampened across all asset classes from money market instruments to equities, while they shunned the bond market.
Foreign direct investments into the country were also down to $148 million, representing 30.65 per cent and 33.41 per cent from what was recorded in Q1’20 and Q’2 19 respectively. The decline in sticky flows was seen in both the private equity space and in other capitals.
Other types of investments including trade credits, loans, currency deposits and other claims also suffered hit, falling to $761 million from the $1.3 billion recorded in the first quarter.
