The aggregate foreign capital inflow into Nigeria increased from $3.97bn in Q3 2013 to $4.94bn in Q4 of same year indicating an increase by 24.3%. This increase was mostly as a result of an increase in direct investment and portfolio investment inflows.
In Q4 2013, both direct and portfolio investment inflows increased by 16.1% and 26.6% to $1bn and $3.94bn respectively in comparison to $0.86bn and $3.11bn obtained in Q3 of the same year.
The CBN’s external sector development report for Q4 2013 showed that while direct investment inflows accounted for 20.3% of the total foreign inflows, portfolio investment inflow remained dominant and accounted for 79.7%.
‘’The higher inflow of foreign capital in Q4 2013 was a welcome development which should be sustained through macro-economic stability and enhanced investment environment including good corporate governance’’ the CBN reported.
The total foreign exchange inflows to the economy decreased by 8.2% in Q4 2013 to $35.34bn from the $38.49bn recorded in Q3 2013. Also, the inflows through the Central Bank decreased from $11.86bn in Q3 2013 to $9.47bn in Q4 2013 declining by 20.2% while inflow through autonomous sources decreased by 2.9% to $25.88bn.
Also, outflows and net inflows of Q4 2013 decreased by 13.1% and 5.7% to $11.22bn and $24.12bn respectively from outflows of $12.91bn and net inflow of $25.59bn obtained in Q3 2013.
It added that at $5.38bn, the current account surpluses was 47.5% and 9.3% higher than the $3.65bn and $4.93bn recorded in Q3 2013 and Q4 2013, respectively.
‘’The development was largely traceable to the lower investment income repatriations as well as improved financial inflows (home remittances) from Nigerians in Diaspora’’ it stated.
Also, as aggregate exports of goods accounted for by the oil and gas component decreased by 3.6% in Q4 2013, non-oil exports increased by 21.3% in Q4 2013.
The improved performance of the non-oil exports may not be unconnected with the current policy emphasis on the promotion of non-oil commodity exports particularly output from commercial agriculture’’ the report revealed.
It stated ‘’similarly, aggregate imports decline by 7.2%. out-payments in the services account increased by 9.9% when compared with the level recorded in Q3 2013 while the deficit in the income account improved from $6.96bn in Q3 2013 to $5.47bn in Q4 2013.
‘’Current transfer surplus, which was driven largely by remittances from Nigerians in Diaspora, widen by 1.7 and 11.1% to $6.06bn in Q4 2013 when compared with the respective levels recorded in Q4 2012 and Q3 2013’’.
The higher foreign currency deposits and outward direct investment of $0.95bn in Q4 2013 compared with $0.21bn in Q3 2013 encouraged the net asset of $0.80bn obtained from transactions in the capital and financial account of Q4 2013 compared to the net liability of $7.06bn obtained in Q3 2013.
‘’The growth in outward direct investment was attributable to the expansion of Nigerian banks in the sub-region. Outward portfolio investment declined by 59.7% to $0.87bn but rose above the level in the corresponding quarter of 2012 by 25.0%’’ CBN reported.