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Portfolio investment inflow declines by 4.4% ­­­­ — CBN report

By on November 19, 2013

Portfolio investment inflow into Nigeria declined by 4.4 per cent from $6.82bn in the first quarter to $6.52bn in the second quarter of 2013, a new report by the Central Bank of Nigeria has shown.

The report entitled, ‘Developments in the External Sector of the Nigeria Economy for the Second Quarter,’ was posted on the central bank’s website.

According to the report, the continued dominance of portfolio investment in aggregate foreign capital inflow suggests the need to put in place durable framework for managing short-term capital inflows.

The report, however, noted that the $6.52bn portfolio investment inflow for the second quarter in 2013 was ‘significantly’ higher than the level recorded in the second quarter of 2012.

The report reads, “Aggregate foreign capital inflows stood at $7.79bn as against $7.58bn and $4.53bn recorded in Q1 2013 and Q2 2012, respectively.

“Of the total capital inflows, portfolio inflows remained dominant and accounted for 83.7 per cent of the total, while Foreign Direct Investment inflows accounted for the balance.

“Further analysis revealed that FDI inflows at $1.47bn, increased from $1.29bn and $0.83bn recorded in Q1 2013 and Q2 2012, respectively, while estimated portfolio investment inflows declined by 4.4 per cent from $6.82bn in Q1 2013 to $6.52bn in Q2 2013, but increased significantly over the level recorded in Q2 2012.

“The continued dominance of portfolio investment in aggregate foreign capital inflows suggests the need to put in place a durable framework for managing short-term capital inflows.”

CBN further quotes available data as indicating that the total foreign exchange inflow to the economy in Q2 2013 stood at $38.17bn as against $34.27bn and $28.19bn recorded in Q1 2013 and Q2 2012, indicating increases of 11.4 and 35.4 per cent, respectively.

Total outflows in the review period amounted to $12.65bn as against $6.40bn and $10.09bn recorded in Q1 2013 and Q2 2012 respectively.

Consequently, a net inflow of $25.51bn was recorded in Q2 2013 as against $27.86bn and $18.10bn in Q1 2013 and Q2 2012, respectively, according to the central bank.

Giving a breakdown of the inflows, the report says, “Foreign exchange inflow through the CBN stood at $9.44bn in Q2 2013 compared with $10.30bn and $12.12bn, respectively in Q1 2013 and Q2 2012, while inflow through autonomous sources was $28.72bn as against $23.96bn in Q1 2013 and $16.07bn recorded in the same period in 2012.

“Outflows through the CBN increased by 98.7 and 28.5 per cent from $6.31bn and $9.76bn in Q1 2013 and Q2 2012 respectively, to $12.54bn in the review period.

“Outflow through the autonomous segment increased to $0.11bn as compared with $0.09bn in Q1 2013 but declined by 66.0 per cent when compared with Q2 2012.”

 

 

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