Nigeria’s foreign direct investment hits $6bn
- Category: Business
- Written by Kayode Ekundayo, Lagos
- Hits: 11
The Central Bank of Nigeria (CBN) has announced that the Nigeria aggregate foreign capital inflows in the last quarter of 2012 stood at $6.07 billion against $3.43 billion and $3.24 billion recorded in Q2, 2012 and Q3, 2011. This shows increases of 87.39 and 77.09 per cent, respectively.
In its latest report, the CBN said of the total capital inflows, foreign direct investment (FDI) accounted for 23.79 per cent while portfolio investment (PI) accounted for 76.21 per cent.
Further analysis showed that both the FDI and PI inflows increased over their levels in Q2, 2012 by 81.0 and 75.9 per cent, respectively.
The apex bank noted that the continued dominance of portfolio investment in aggregate foreign capital inflows suggests the need to put in place measures against capital reversal.
The bank also disclosed that Nigeria’s trade balance improved significantly from $8.62 billion in Q2, 2012 and $1.60 billion in Q3, 2011 respectively to $12.37 billion in Q3, 2012.
Aggregate exports rose by 8.2 per cent from $22.53 billion in Q3, 2011 to $24.37 billion in Q3, 2012 while aggregate imports declined by 42.7 per cent to $11.99 billion in the review period.
The degree of openness, depicting the share of Nigeria’s total external trade to GDP dropped further to 54.52 per cent in Q3, 2012 from 59.64 and 65.97 per cent recorded in the preceding quarter, and the corresponding quarter of 2011, respectively.
Imports as a percentage of GDP also decreased by 5.09 percentage points to 18.0 per cent from its level in Q2, 2012. “This development, however, suggests that the integration of the Nigerian economy could be enhanced through a supply-led strategy with focus on competitiveness of domestic output,” the CBN said.
The report also indicated that foreign exchange inflows to the economy in the third quarter also stood at $30.78 billion as against $27.36 billion recorded in the second quarter, representing an increase of 12.52 per cent.