The Nigerian weak business confidence continued to impede foreign direct investments in the country following the drop in the foreign investment inflow to its second lowest in 10 years.
Total Foreign investment recorded in the first quarter of the year stood at $908.27 million, according to the National Bureau of Statistics (NBS). This, represents a decline of $640.61 million or 41.36 percent when compared to the $1.55 billion recorded in the last quarter of 2016.
The decline in investment inflow was attributed to the fall in “other investment” and portfolio investments, mainly equity, which plunged from $176.44 million in the last quarter of 2016 to $101.99 million in the first quarter of 2017. Also, loans declined from $917.01 million to $369.28 million, and bonds which recorded $25.4 million by the end of the fourth quarter of 2016, did zero in the first quarter of 2017.
However, on a quarterly basis, the total value of capital imported in 2017 rose by 27.75 percent when compared with 2016 first quarter but 41.36 percent lower than the final quarter of 2016.
The report read in part, “Capital importation was particularly low in January, at $187.9m; this was only the fourth month since 2007 in which capital importation was less than $200m.”
“There was a high-profile sale of (bonds denoted in a non-local currency) during the quarter, but this has not yet appeared in the data; there is a lag between subscription and actual payment, and, therefore, it is possible that this will show up next quarter.
According to the report, despite the quarterly fall “other investment” remains the largest investment inflow in the first quarter of 2017, representing 42.20 percent of total investment inflow.
“The recent surge in investment inflow after the new investors and exporters forex window was launched in April will boost the FDI data in the second quarter,” said Samed Olukoya, a foreign exchange research analyst at Investors king Ltd.
“While, positive OPEC consensus on Thursday is expected to bolster economic outlook as it would validate the CBN sustainability of the ongoing forex intervention,” he added.