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The National Bureau of Statistics reported on Friday that the total value of Nigeria’s capital imports fell to $1.29 billion in the second quarter of 2020, representing a 77.88 per cent decline compared to $5.85 billion recorded in the first quarter of this year.

On a year-on-year basis, however, the value of foreign capital flows into the country in Q2 2020 was 78.60 per cent lower than the N6.05 billion posted in Q2 of 2019.

The main driver of the sharp decline in foreign capital flows between April and June this year was not unconnected to the economic impact of the COVID-19 pandemic. Foreign direct investment (FDI) – in form of equity and other capital – fell by 30.65 per cent on a quarterly basis, and 33.41 on a y/y basis, to $148.59 million. NBS said FDI accounted for 11.47 per cent of total capital imported in Q2 2020.

The leading contributor to the decline in capital importation during the period under review was portfolio investment – which includes equities, bonds, and money market instruments. While this type of investment accounted for 29.76 per cent of total foreign capital flows in the review period, it fell 91.06 per cent from Q1 2020 to $385.32 million in Q2 of this year.

The largest amount of capital importation by type was received through ‘other investment’, which accounted for 58.77 per cent ($761.03 million) of total capital imported. This type of investment includes trade credits, loans, currency deposits and other claims.

Other investment declined by 42.81 per cent on a quarterly basis, and 48.60 per cent compared to a similar period of last year.  

"The United Kingdom emerged as the top source of capital investment to Nigeria in Q2 2020 with $428.83m. This accounted for 33.12% of the total capital inflow in Q2 2020," the statistics agency said.

Lagos State remained the largest capital importing state, accounting for $1.13 billion (87.30 per cent) of the total capital inflow in Q2 2020. Abuja and Ogun State recorded the second and third largest amounts of imported capital, accounting for $145.30 million (11.20 per cent) and $11 million (0.85 per cent), respectively.