29 November 2017, Sweetcrude, Abuja — Foreign investment inflow into the Nigerian petroleum industry slowed drastically in the third quarter of 2017, as foreign capital inflow into the industry dropped by 91.56 percent to $16.07 million from $190.39 million recorded in the second quarter of 2017.
Data obtained from the Third Quarter 2017 Nigerian Capital Importation Report released by the National Bureau of Statistics, NBS, revealed that the value of foreign capital imported into the country was the least in seven consecutive quarters, since the first quarter of 2016.
The report also noted that the amount of inflow in the third quarter of 2017 also represented a decline of 90.64 percent from $171.63 million recorded in the third quarter of 2016.
The oil and gas industry accounted for 0.39 percent of total foreign capital imported into the country in the period under review.
Specifically, the report stated that the total capital imported in the third quarter stood at $4.145 billion, more than doubling the inflow recorded in the second quarter of this year, representing an increased value of 147.5 percent on a year on year basis.
The NBS pointed out that the capital importation into Nigeria in the third quarter of 2017 recorded a substantial increase compared to the past few quarters, as the economy continued to recover from the recession following its exit in the second quarter.
“This inflow of capital in third quarter 2017 is the first time since the beginning of 2015 that capital hit over $4 billion in a quarter. The boom in capital importation in the period under review was mainly driven by significant growth in both portfolio investment and other investment,” the NBS added.
The report further stated that the highest source of foreign capital inflow into Nigeria was the United Kingdom, accounting for $1736.58 million, or 41.89 percent of the total capital inflow in the period under review.
According to the NBS, this value represented a 149.26 percent increase in capital importation relative to the figure in the previous quarter and a 58.22 percent growth over the same period in last year.
“As well as the existence of a historical relationship between the UK and Nigeria,
London, the capital of the UK, is also a key financial centre, which explains the high value of foreign capital invested by the UK. Since 2010, the UK has accounted for the highest value of capital importation in all but two quarters, both in the second half of 2015,” the NBS explained.
The United States followed, emerged the source with the second largest capital inflow into Nigeria.
The report noted that the US accounted for $962.1 million foreign investment inflow into the country in the third quarter of 2017 or 23.21 percent of the total.
It said, “The US has also been one of the most important investors in Nigeria, usually either the largest or second largest investor country. It also shares a language with Nigeria, it has also been historically the largest economy in the world, and is active in foreign investment globally.”
The report also disclosed that the next two largest investors in the third quarter of 2017 were Tanzania and Mauritius, accounting for 7.61 percent and 5.53 percent respectively.