Nigeria’s total capital importation for the third quarter (Q3) of 2024 witnessed a 51.90% decline from the previous quarter, falling to $1.25 billion.
This drop, compared to the $2.60 billion recorded in Q2 2024, highlights a sharp contraction in foreign investments despite an overall annual increase of 91.35% from Q3 2023.
The latest Capital Importation report by the National Bureau of Statistics (NBS) reveals that while Nigeria’s capital importation showed substantial growth year-on-year, there was a notable retreat in inflows compared to the preceding quarter.
The report read, “In Q3 2024, total capital importation into Nigeria stood at US$1,252.66 million, higher than US$654.65 million recorded in Q3 2023, indicating an increase of 91.35%. In comparison to the preceding quarter, capital importation declined by 51.90% from US$2,604.50 million in Q2 2024.”
Portfolio investment dominates
The report shows a stark difference in the composition of capital importation across sectors and investment types. Portfolio investment dominated the inflows in Q3 2024, contributing $899.31 million (71.79%) of the total capital. This reflects continued investor interest in Nigerian equities, bonds, and other financial assets despite the broader decline.
- Other investments followed with $249.53 million, representing 19.92%, while Foreign Direct Investment (FDI), a critical indicator of long-term investor confidence, accounted for just $103.82 million, or 8.29%, marking a relative underperformance.
Banking sector takes the lead
In terms of sectoral allocation, the banking sector recorded the highest inflow, attracting $579.48 million, or 46.26% of the total capital importation. This highlights the continued role of the financial sector in attracting foreign investment.
- The financing sector came second, receiving $294.55 million (23.51%), while the production/manufacturing sector secured $189.22 million (15.11%). These figures point to a mixed level of interest across different sectors, with a significant share of investment still directed towards financial and lending activities.
UK as Nigeria’s top source of foreign capital
Capital importation in Q3 2024 was predominantly sourced from the United Kingdom, which accounted for $502.60 million (40.12%) of the total capital inflows.
- This was followed by South Africa, with $185.03 million (14.77%) and the United States, contributing $163.86 million (13.08%). The dominance of the UK and South Africa reflects ongoing investment flows from major African and European economies into Nigeria, despite the overall decrease in inflows during the quarter.
Lagos remains top destination
Lagos continued to dominate as the primary destination for capital inflows, receiving $650.41 million, or 51.92% of the total capital imported in Q3 2024.
- The Federal Capital Territory (FCT), which includes Abuja, secured $600.02 million (47.90%), demonstrating the significant role of Nigeria’s political and economic hubs in attracting foreign investment.
- In contrast, other states such as Kaduna, Enugu, and Ekiti collectively received only a small fraction of the capital inflows, underscoring the concentration of investment in a few key regions.
- On an institutional level, Standard Chartered Bank Nigeria Limited received the largest share of capital inflows, with $385.62 million (30.78%).
It was followed closely by Stanbic IBTC Bank Plc, which attracted $382.08 million (30.50%), and Citibank Nigeria Limited, which brought in $192.88 million (15.40%). These financial institutions remain central players in managing and facilitating international capital flows into Nigeria.