The Central Bank of Nigeria, CBN has disclosed in its third quarter 2013 report that Nigeria’s Foreign Direct Investment, FDI dropped by $0.61billion (about N97.6 billion) from $1.47billion (N235.2 billion) in the second quarter of 2013 to $0.86 billion (about N137.6) in the third quarter of 2013.
The apex bank stated that at $4.91 billion between July and September 2013 aggregate foreign capital inflow declined by 42.8 per cent from $8.58 billion in the second quarter (April-June), 2013 due to the decline in both direct investment and portfolio investment inflows. Similarly, portfolio investment inflow declined by 52.3 per cent from $6.52 billion in second quarter of 2013 to $3.11 billion in the review period.
CBN’s report stated “Other investment inflows increased by 59.5 per cent from $0.58 billion in Q2 2013 to $0.93 in Q3 2013. Portfolio investment inflow remained dominant and accounted for 63.4 per cent of total foreign inflows while direct investment inflows accounted for 17.6 per cent of total. Other investment inflows accounted for the balance.”
Continuing, the CBN’s report stated that provisional data revealed that Nigeria’s trade balance declined from $10.60 billion in Q2 2013 to $9.86 billion in Q3 2013. The report said “Trade balance as a percentage of Gross Domestic Product, GDP declined from 19.07 per cent in Q3 2012 to 16.20 per cent in Q2 2013 and 13.79 per cent in Q3 2013. This development could be attributed to the decline in aggregate export proceeds induced by the fall in oil exports and reflected the country’s over -dependence on oil exports and the need for the diversification of the Nigerian economy.
The apex bank further revealed that share of total trade, exports, imports, total foreign exchange flows and net flow as percentage of GDP declined in the review period to 57.7, 33.7, 18.1, 72.5 and 35.2 per cent, respectively, compared with their levels in Q2 2013. This implies that the Nigerian economy is well integrated into the global economy and should be sustained through policies that will enhance increased domestic production Inflow and Outflow.
Available data, according to the bank revealed that foreign exchange inflows to the economy in Q3 2013 stood at $38.49 billion as against $38.17 billion recorded in Q2 2013 indicating a marginal increase of 0.9 per cent. Inflows through the Central Bank increased by 25.6 per cent from $9.44 billion in Q2 2013 to $11.86 billion in the review period while in-flows through autonomous sources declined by 7.3 per cent to $26.64 billion. Outflows in the Q3 2013 increased by 5.6 per cent to $13.36 billion as against $12.65 billion $25.51 billion in Q2 2013 indicating a decline of 1.5 per cent. The CBN component of foreign exchange flows recorded a net outflow of $0.81 billion during the review period as against a net inflow of $3.1 billion in Q2 2013.
