Nigeria witnessed a significant influx of foreign loans in 2023, comprising 59.1% of the total capital importation into the country, amounting to $2.31 billion, as revealed by the latest capital importation report released by the National Bureau of Statistics (NBS).
The report highlights a notable increase in foreign capital inflow, rising from $654.65 million in Q3 2023 to $1.09 billion in the final quarter of the year. Despite recording a total foreign investment of $3.91 billion in 2023, Nigeria’s capital importation varied across different quarters, with $433.87 million in Q1, $771.53 million in Q2, $507.71 million in Q3, and $594.75 million in Q4, primarily from foreign loans.
Analysis of the report underscores a shift in the government’s borrowing preferences towards domestic sources, contributing to an 18% decrease in foreign loans compared to the same period in the previous year. However, there was a modest year-on-year improvement of 2.62% in Q4 2023, surpassing the figures from the corresponding period in 2022.
Further examination reveals that “Other Investment” emerged as the dominant category, representing 54.64% or $594.74 million of the total capital inflows for Q4 2023, followed by portfolio investment at 28.46% or $309.76 million, and foreign direct investment contributing 16.90% or $183.97 million.
In terms of sectors, the production/manufacturing sector led the capital inflow with $450.11 million, accounting for 41.35% of the quarter’s total capital importation, followed by the banking sector with $283.30 million (26.03%), and the financing sector at $135.59 million (12.46%).
The report also highlights the significant contribution of investments from the United Kingdom, Mauritius, and the Netherlands, with investments totaling $267.24 million, $226.18 million, and $149.93 million, respectively, in Q4 2023.
Amidst these findings, the Federal Government recently announced securing investment commitments worth $30 billion from foreign investors within the last eight months, underscoring ongoing efforts to attract foreign investment and drive economic growth.
The NBS report sheds light on the evolving landscape of Nigeria’s capital importation, emphasizing the need for prudent financial management and strategic investment policies to enhance economic sustainability and prosperity.
