The banking sector attracted the highest capital investment in January accounting for 39.9 per cent or $151.62 million out of the total Foreign Direct Investment (FDI) in the country.
The CBN economic report for January stated that a total of $0.38bn new capital was imported into the economy in January 2021, compared with $0.55bn in December 2020.
The report stated that FDI dipped by 33.3 per cent which amounted to $30m in January.
According to the CBN figures, the country reported FDI of $90m in December which declined to $60m in January.
The reduced capital importation in the month under review was attributed to the tight global financial conditions and narrowing interest rate differentials, caused by low yields on domestic money market instruments.
The report read in part, “The report added that in terms of capital importation by nature of investment, banking accounted for 39.6 per cent; shares, 31.5 per cent; production/manufacturing, 12.8 per cent; telecommunication, 6.1 per cent; financing, six per cent; and agriculture, four per cent.
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“A disaggregation of capital importation by type of investment showed that inflow of Other Investments accounted for the largest share at $0.29bn, and represented 75.5 per cent of the total, followed by FDI inflow of $0.06bn, which accounted for 16.4 per cent.
“Foreign Portfolio Investment inflow, at $0.01bn, constituted 8.1 per cent of the total. When compared with the $0.44bn, $0.09bn and $0.02bn for OI FDI and FPI, respectively, in the previous period, it indicated a decline of 34.1 per cent, 33.3 per cent and 50.0 per cent, respectively.”
Analysis of capital importation by originating country showed that the United Kingdom, The Netherlands, Republic of South Africa, United Arab Emirates, Singapore, Denmark and Hong Kong accounted for 46.8 per cent, 20.1 per cent, 7.9 per cent, 6.5 per cent, 4.2 per cent, 3.2 per cent and 3.1 per cent, respectively, of the total inflow.
By destination of capital, the report added that Lagos State, Abuja and Ogun State were the top recipients of the inflow at $0.18bn (75.6 per cent), $0.08bn (24.1 per cent), and $0.006bn (0.2 per cent) respectively.
According to the report, capital outflow decreased significantly by 83.6 per cent (month-on-month) to $0.11bn in January 2021, relative to $0.67bn in December 2020.
