Portfolio investments in Nigeria declined in fourth quarter 2016 – NBS

Naira Notes
Naira Notes used to illustrate the story

The National Bureau of Statistics, NBS, says the total value of capital imported into the country in the fourth quarter of 2016 is estimated to be $1.5 billion dollars.

This is according to “Nigerian Capital Importation for the Fourth Quarter of 2016” released by the NBS in Abuja on Wednesday.

The report stated that the importation in the quarter represented a decrease of 15.00 per cent relative to the third quarter, and a fall of 0.52 per cent relative to the fourth quarter of 2015.

According to the report, there are three major categories of investments that make up the total investment inflow into the country. They are portfolio investments, Foreign Direct Investments (FDIs) and other investments.

“The level of capital imported was similar in each month of the quarter, but the highest was in December, of 555.37 million dollars.

“The decline relative to the precious quarter was entirely due to a decline in portfolio investment; FDIs and other investment increased.

“The quarterly decline in portfolio investment was mainly due to effects; there were large investments in money market instruments and bonds in the third, which were not matched in the final quarter.’’

In the year 2016, the report stated that capital importation fell by 46.86 per cent, from $9.64 billion in 2015 to $5.12 billion.

This, the report stated was the lowest value since the series started in 2007, which reflected the numerous economic challenges that afflicted Nigeria in 2016.

“The weakening of the Naira may have an impact; a weaker Naira means more can be purchased with each dollar, and therefore investment projects requiring Naira payments cost less in dollar terms.

“Portfolio investment fell the most by 69.81 per cent.

“The investments type, whereby investors seek returns rather than control of management in companies, is most likely to be affected by current market conditions.

“Foreign direct investors take a longer-term view, and therefore Nigeria recession and currency problem may carry less weight in investment decisions.’’

In addition, the report stated that FDIs fell by 27.83 per cent between 2015 and 2016, considerably less than portfolio investment.

“By contrast, other investments increased between 2015 and 2016 by 3.48 per cent. This was entirely due to an increase in loans,’’ the report stated.


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