Latest data from the National Bureau of Statistics shows that investment inflow into Nigeria experienced a great decline in the first nine months of 2016.
It recorded an inflow of USD3.57bn in 2016 in contrast to its inflow of USD8.08bn in the same period in 2015, this represent a decline of 55.2% according to a report obtained from the National Bureau of Statistics. The harsh economic state has been revealed to contribute to decline.
A breakdown of the inflow revealed that USD710m investment was recorded in Q1 2016 , Q2 have the sum of $1.04bn while Q3 is recorded to be $1.82bn which is against the USD2.67bn, $2.66bn and $2.74bn recording in the corresponding periods of the 2015 fiscal year respectively.
A breakdown of the $1.52bn portfolio investments showed that equity accounted for $682.6m; bonds $370.5m and money market instruments $475.55m.
In terms of the composition of the investment inflows, the report said the largest component of capital importation in the nine months period was portfolio investment attracting a total sum of $1.52bn.
This was followed by “other investments with $1.35bn and foreign direct investment with $699.39m.
The report attributed the huge decline in capital importation to what it described as the symptoms of the challenging period that the Nigerian economy is going through following the fall in crude oil prices.
It said while there were a number of reasons why the amount of capital imported in recent years had been higher than usual, the drop between last year and this year suggested that there were further reasons why Nigeria had attracted less foreign investments in recent quarters.
“Investors may be concerned about whether or not they will be able to repatriate the earnings from their investments, given the current controls on the exchange rate.
“In addition, as growth has slowed in recent quarters, there may be concerns about the profitability of such investments,” it added.