Growing insecurity typified by killings and destruction of properties as well as social discontent, among others, have been identified as some of the reasons for growing reduction in capital importation into Nigeria, according to some analysts.
More worrisome is the fact that the majority of the capital imported in the last few months are portfolio investments, which add little or nothing to the growth prospect of the country.
As a sign of importation, a certificate of Capital Importation better known as CCI, which is a document obtained from the Central Bank of Nigeria (CBN) through the local commercial banks is issued.
The certificate proves that cash, equipment or a combination of both from foreign investors has been received by an entity incorporated in Nigeria.
The Certificate is issued to a foreign investor as evidence of an inflow of foreign direct capital investments (FDIs), either as equity or debt; cash or goods.
Futher analysis shows that the direct investments last longer than the portfolio ones, (hot money) which goes after existing opportunities, like, for instance, the recent hike in the monetary policy rate which is expected to make the fixed government backed instruments more attractive due to higher rate.
Consequently the current report from the nation's statistics burea is not cheering enough as it says that capital importation into the county dropped on a quarter-on-quarter basis by 28.1% to $1.6 billion in the first quarter (Q1) of 2022.
This is 28.1% lower than the $2.19 billion recorded in Q4, 2021, while year-on-year (y/y), the capital importation fell 17.5% from $1.9 billion recorded in Q1 2021
According to NBS, “the largest amount of capital importation by type was received through Portfolio Investment, which accounted for 60.9 ($957.6 million).
“This was followed by Other Investment with 29. 3% ($460.6 million) and Foreign Direct Investment accounted for 9.9% ($154.9 million) of total capital imported in Q1 2022,” the report stated.
The report further showed that across sectors, banking attracted the highest investment inflow of $818.8 million or 52.1% of the total capital imported during the period in review.
This was followed by capital imported into the production sector, valued at $223.7 million (14.2%), and the financing sector with $199.37 million (12.7%).
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By country of origin, the United Kingdom ranked top with a value of $1.021.2 million or 64.9% of the total capital imported in Q1 2022, followed by South Africa at $117.5 million (7.5%), and the United States of America $82.1 million (5.2%) respectively.
In terms of investment destinations only Abuja, Akwa Ibom, Katsina Lagos, Oyo, and Plateau out of the 36 states attracted inflows.
The country is currently mourning over the massacre of some worshippers at catholic church in Owo, ogun state
President Muhammadu Buhari as the chief mourner, religious bodies, civil organizations have criticized the killing of over 21 people as at Sunday.
On the social discontentment pervading the fabric of the nation, Bismark Rewane, a foremost economist gave an analogy in the current LBS Executive Breakfast Session thus:
"The cost of APC presidential expression of interest form was N100million, 79 percent higher than the cumulative salary of the president,(N56Mn).
“The cost of the bait is twice the revenue of the catch. The marginal cost is higher than the marginal revenue. “
Thi is the same country where one of the governors and presidential aspirant, Yahaya Bello of Kogi pays 35 percent of the meagre salaries to local government workers and pensioners.
Gratuities of some staff that either retired voluntarily of forced to retire are yet to be paid, while others are reveiving theirs in piecemeal and at some 'costs to the beneficiaries'.
The world bank had projected that subsidy payments by the Federal Government might reach N6 trillion, while the country had witnessed zero remittance by the NNPC into the Federation Account since this year due to payment of subsidies, for which the said targeted people, are not enjoying from the intended benefits.