Capital inflow into Nigeria rose almost sixfold in the first quarter compared to a year ago, following last year’s liberalisation of the currency for foreign investors and steps to tighten liquidity to attract offshore funds.
Figures released on Friday by the National Bureau of Statistics showed capital inflow had hit $6.3 billion in the quarter, dominated by offshore portfolio investors buying local shares and bonds rather than foreign direct investment.
Capital imports have been growing especially as economic activity gains pace after Nigeria emerged from a recession last year. They rose for the fourth straight quarter since the second quarter of 2017.
Portfolio investment has been rising faster than direct investment which is still weak. The NBS said the strong growth in portfolio investment was due to money market yields.
The fall in bond yields have prompted foreign investors to repatriate profits rather than re-invest them, putting pressure on the currency.
Capital imports were more than $5.3 billion in the third quarter.
.Reuters