Dear Esteemed Client:
The National Bureau of Statistics (NBS) today published the capital importation statistics for Q3:2019 with the data showing that total capital imported for the quarter impressively jumped 87.99% Y-o-Y to settle at $5,367.56m compared to Q3:2018 levels of $2,855.21m. Foreign Portfolio Investment (FPI) received the largest amount of total capital imported at $2,999.50m (55.88%) followed by other investments valued at a total of $2,167.98m (40.39%). Foreign Direct Investment(FDI) accounted for $200.08m (3.73%). Money market instruments made up 85.00% of the FPI at $2,549.71m, growing at 197.48% Y-o-Y relative to Q3:2018 level of $1,291.10m. Further analysis of the data also show that Lagos state was the largest destination of imported capital for the quarter with $4,976.40m accounting for 93.71%.
In our view, Q3:2019 capital importation data further revealed Nigeria’s susceptibility to “Hot Money” through FPI and the need for the CBN to keep attracting capital to moderate the pressure on external reserves which has fallen to 22-month’s low at the current $39.93bn levels. We believe the CBN will keep the OMO rate continuously attractive for foreign portfolio participation especially given that FPI accounts for ca 45.00% of maturing OMO bills. Read more