Nigeria Records 74% Fall in Import Value, says NBS |The Source

By Uche Mbah

The National Bureau of statistics Tuesday said that the foreign capital inflow to Nigeria fell 74.03% in the third quarter of 2020, closing at $1.46 billion.

Last year, the figure stood at $5.63 billion in the third quarter.

Ironically, there was a marginal increase from the second quarter, which stood at $1.29 billion as against the third-quarter figure. This amounted to a 12.86% decline, situation analysts believe was due to the impact of the COVID 19 pandemic on world economy. With the third wave already ravaging some parts of Europe, the figure is expected. 

The United Kingdom continues to play a dominant role as the highest source of capital inflow into Nigeria.  It accounted for 40.69 percent of the total capital inflow in the third quarter of 2020. In the whole year, the investment from the UK stood at $594.65 million, the NBS said.

But aside from the Country, the Standard Chartered Bank Nigeria Limited emerged at the top as the bank of choice for capital investment in Nigeria during the period under review with $438.98 million having been channeled through the bank to the country by investors.

The capital inflow has its own impact on the domestic foreign exchange market. The Naira has in recent times taken a pounding from the dollar, particularly since the Covid 19. Only recently the Central bank of Nigeria marginally devalued the Naira and lifted the embargo on receiving money through Dollars from overseas. This was the third interference in the foreign exchange this year, resulting in panic buying at the parallel market.

The reduction in dollar flow resulted in shock to the foreign reserve, which was a direct result of low sales in the oil and gas sector due to partly the grounding of flights due to the pandemic. Consumption worldwide was adversely affected.

Other investment accounted for 43.75 percent or $639.44 million of overall capital importation, followed by Foreign Direct Investment (FDI), which accounted for 28.38 percent or $414.79 million of overall capital imported and Portfolio Investment which accounted for 27.87 percent or $407.25 million of total capital imported in the last quarter of the year 2020.