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Foreign loans push capital importation up by 19% to $330m

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Foreign loans push capital importation up by 19% to $330m

Higher loan inflows in to Nigeria increased capital importation into the country in January 2024 by 19 percent month-on-month, MoM, to $330 million from $280 million in December 2023, according to the Central Bank of Nigeria (CBN).

The apex bank which disclosed this in its Monthly Economic Report for January 2024, said: “Higher inflow of loans boosted foreign capital inflow in the review month.”

Providing further details on the capital importation during the period, the CBN report stated: “New investments to the economy increased by 17.9 per cent to $0.33 billion, from $0.28 billion December 2023.

“Portfolio investment inflow increased by 9.1 per cent to $0.12 billion, from $0.11 billion, due, largely, to higher purchase of money market instruments.

“Similarly, foreign direct investment inflow increased to $0.03 billion, from the level in the preceding month.

“Other investment capital, mainly in the form of loans, also rose by 12.5 per cent to $0.18 billion, from $0.16 billion in the preceding period.

“In terms of share, inflow of other investment capital (mainly loans) constituted 55.1per cent, while foreign portfolio investment and foreign direct investment accounted for 34.8 and 10.1per cent, respectively.”

The apex bank also said that investment in production/manufacturing accounted for the highest contribution to capital importation by 28.2 per cent followed by telecommunication (23.4 percent) and banking (22.6 percent).

The apex bank also said that capital inflow by originating country showed the United Kingdom as the major source of capital, contributing 26.6percent during the period followed by Singapore with 16.1 per cent.

Conversely, capital outflow fell by 8.8 percent to $310 million due to a decline in loan repayment and repatriation of dividend.

The report stated: “Capital outflow from the domestic economy moderated, due to lower loan repayment and repatriation of dividends.

“Capital outflow fell by 8.8per cent to $0.31billion in January 2024, from $0.34 billion in the preceding month.

“Repatriation of dividends decreased by 50 per cent to $0.01billion, while loan repayment fell by 10 percent to $0.18billion.

“Similarly, capital reversals decreased by 23 percent to $0.10 billion.

“In terms of share in total outflow, loans constituted 66.2 per cent, followed by capital reversal and dividends at 31.6 and 2.0 per cent, respectively.

“Other forms of outflow accounted for the balance,” CBN said.

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