Nigeria’s capital imports slumped to a nine-year low in 2016 as Africa’s biggest economy battled a weaker currency and its first recession in 25 years.
The National Bureau of Statistics (NBS) said on Wednesday that capital importation into Nigeria fell 47 percent last year to $5.12 billion, largely because the weak currency meant fewer dollars were required for the same naira investment.
It said $9.64 billion was imported in 2015.
“This was the lowest value since the (data) series started in 2007, which reflects the numerous economic challenges that afflicted Nigeria in 2016,” the statistics office said.
Equity investments from portfolio investors and direct investment rose sharply from 2012 to 2014, at a time when Nigeria was one of the fastest growing economies in the world and a top destination for investment.
But a sharp drop in the price of crude oil, Nigeria’s main export, from mid-2014, slashed government finances, weakened its economy triggering a recession and battered its currency, frustrating business and leading investors to flee its markets.
The NBS said portfolio investments fell the most in 2016, deterred by the recession and the currency, down by 69.8 percent from 2015, as investors weighed market conditions relative to expected returns.
Nigeria’s stock market fell 6.2 percent last year while the naira lost a third of its official value against the dollar. In 2017, stocks have continued to fall, down 3.1 percent so far, while the naira is almost 40 percent weaker on the black market.
The NBS said Nigeria imported the bulk of its capital from Britain, the U.S. and Netherland, with the telecoms, banking and oil sectors the main beneficiaries.