Visible dip in capital inflows for Q3

The NBS has recently released the latest report in its Nigerian Capital Importation series, which covers Q3 2018. The data were obtained from the CBN and compiled using information on banking transactions from all registered financial institutions in Nigeria. The total value of capital imported in Q3 was estimated at US$2.9bn, representing decreases of -31% y/y and -48% q/q. The data are gross, and not adjusted for capital exports.


  • Portfolio investment decreased significantly by -58% q/q. However, it still accounted for the largest share (60%) of total capital importation. Money market instruments accounted for 75% of total portfolio investment, and bonds a paltry 2%.
  • The NBS gamely puts together a table on capital imports by sector across the three categories (direct, portfolio and other investment) combined. It is not immediately clear where inflows under the categories are allocated under the various sectors. Shares predominate with US$1.7bn out of the US$2.9bn total, followed by US$370m for financing.
  • Foreign direct investment (FDI) inflows surged by 103% q/q to US$530m and posted a y/y increase of over 300%. In Q3 they represented 18% of total capital importation, compared with 5% the previous quarter. To maintain or surpass this pace of FDI inflows, structural issues need to be addressed such as power supplies, transport deficiencies, regulatory challenges and excessive bureaucracy.


Capital importation by type (US$ m) 

National Bureau of Statistics (NBS); FBNQuest Capital Research


  • We do not see much if any growth in capital imports in Q4. The largest disincentive across frontier and emerging markets remain the FOMC’s policy of monetary normalization. Turning to Nigerian factors, we have to mention the election cycle that runs to February/March 2019. Although we have shown that there has been limited macroeconomic slippage in the build-up to the last three elections, including for offshore inflows on the stock market, there is a widespread view that the correlation is actual.

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