Capital importation drops by $2b in one year – Guardian

The record of capital importation into Nigeria dropped by $2.05 billion between June 2015 and 2016, an analysis of Capital Importation Report has shown.

This came as the figures for the second quarter of 2016 were estimated at $647.1 million, representing 75.73 per cent decline from the volume of capital inflows in the corresponding period of 2015.

The amount recorded in the second quarter also represented 8.98 per cent decline relative to the first quarter figures at $711 million.

According to the Nigerian Bureau of Statistics, the figure marked the lowest level of capital imported into the economy on record; the largest year-on-year decrease; and the second consecutive quarter in which these records have been set.

It noted that the persistent decline in the value of capital imported into the economy is symptomatic of the difficult period the country has been going through.

“The second quarter saw the economy enter into the first recession during the rebased period (according to the technical definition of two consecutive periods of decline).

“This may suggest less profitable opportunities for investment. In addition, in the second quarter there was considerable uncertainty surrounding future exchange rate policy, which may have deterred investors.

“The Naira was allowed to depreciate towards the end of the quarter. These factors were likely to have contributed to the record decline in capital importation,” the NBS report noted.