How COVID-19 down Nigeria’s capital inflow by 78.60% in Q2

As countries across the world battling with the impact of COVID-19 pandemic, Nigeria’s capital inflows have dropped significantly by 78.60% in the second quarter of 2020, as against the figure reported during the corresponding period of Q2 2019.

Capital inflow, a movement of funds into the domestic economy from abroad, representing either the purchase of domestic financial securities and physical assets by foreigners, or the borrowing of foreign funds by domestic residents.

However, a report released by the Nigerian Bureau of Statistics (NBS) at the weekend, the country recorded $1.29 billion capital importation in the second quarter of this year, representing a decrease of 77.88% compared to Q1 2020.

It revealed that Other Investment contributed $761.03 million, which represents 58.77% of the total capital imported, Portfolio Investment accounted for $385.32 million, which is 29.76% of the capital inflow.

Meanwhile, Foreign Direct Investment (FDI) contributed $148.59 million to the capital inflow, accounting for 11.47% of the 2020 second quarter fund, bringing the total of the capital imported to $1.29 billion.

Majority of this fund went to Lagos State with $1.13 billion, followed by Abuja which got $145.3 million, Ogun State was third with $11 million, Niger State accounted for $6.86 million, Anambra State got $1.16 million, and Kano State $0.13 million while other states didn’t receive any foreign capital inflow in the second quarter of the year.

Countries that contributed the highest according to the NBS report are the United Kingdom followed by South Africa, United Arab Emirates, Netherlands, Singapore, and the United States coming at sixth.

The decline in the second quarter of 2020 can be attributed to the COVID-19 pandemic as businesses were closed and governments across the world were forced to close their borders.