According to figures revealed from the National Bureau of Statistics, it states that there was a significant investment of $4.3bn in the first quarter and a reduction of investment in the second and third quarters to $385.32m and $407.25m respectively.
The portfolio investment consisted of equity, bonds as well as money market instruments.
Though the portfolio investment suggests that are passive rather than active management or control of the issuing company.
Based on a monthly report from the Central Bank of Nigeria in October, capital inflow declined by 71.4 per cent due to challenging global financial conditions as developing economies struggled with the second wave of the COVID-19 pandemic.
CBN’s states that capital importation by nature of investment was dominated by portfolio investment, which accounted for 41.5 per cent, followed by production/manufacturing (16.3 per cent), financing (13.4 per cent), trading (9.6 per cent), and agriculture (eight per cent).
A breakdown of capital by originating country showed that the United Kingdom took the lead with 25.3 per cent. The Netherlands and Singapore accounted for 14.8 per cent and 8.3 per cent respectively of the total inflow.
By location, Lagos State, Abuja as well as Enugu were the leading recipients of the inflow at $0.11 bn, $0.07 bn as well as $0.01 bn respectively.
It stated that the moderation in the repatriation of dividends by non-resident investors resulted in the 18.6 per cent decline in the capital outflow to $0.48bn in October 2020, relative to the $0.59bn in the preceding month.
A thorough disaggregation revealed that, of the overall capital outflow, loan repayment component was at $0.17bn accounted for 35.9 per cent, while dividends at $0.04bn accounted for 9.4 per cent. Capital reversal of $0.26bn accounted for 54.7 per cent.
