by Tunji Andrews
Capital imported in the Second Quarter of 2014 was recorded at a value of $5,803.89 million. It increased by $1,899.33 million or 48.64% from the $3,904.55 million recorded in the opening quarter of this year. Relative to the $5,617.66 million recorded in the corresponding quarter of 2013, capital importation a demonstrated positive year on year growth of $186.23 million or 3.32%.
The capital importation prior to 2013 was rising steadily, recovering from the lows recorded post the 2008 financial crisis. It reached its peak in the First Quarter of 2013, where $6,699.57 million was imported to Nigeria. Capital importation however declined in the following quarters, dropping to $3,904.55 million in the opening quarter of 2014, a year on year decline of $2,696.02 million or 40.85%. The second quarter value brought the total capital imported through the First Half of 2014 to $9,708.44 million, which was still $2,509.79 million or 20.54% lower than the $12,218.23 million recorded for the same period in 2013.
Capital Importation can be divided into three main investment types: Foreign Direct Investment (FDI), Portfolio Investment and Other Investments, each comprising of various sub-categories. Portfolio Investment, stood at $4,917.34 million, making up 84.72% of the Second Quarter, 2014 total. The second greatest investment type was Foreign Direct Investment (FDI), which constituted $472.99 million, or 8.15%, whilst the remaining 7.13% or $413.63 million was represented by Other Investments.
Continuing its increasingly dominant trend, Portfolio Investments in the Second Quarter of 2014 was up by $2,047.94 or 71.38% relative to the $2,869.19 million recorded in the preceding quarter, and grew by $429.63 million or 9.53% year on year. Subsequently, its total share of Capital Imported increased by 11.24 percentage points from the 73.48% in the preceding quarter to 84.72%. The Second Quarter 2014 share was also 4.84 percentage points greater than the 79.88% it represented in the corresponding quarter of 2013.
Equity was the key growth driver of Capital Imported in the quarter, constituting 85.03% of the positive change in capital importation from the opening quarter of 2014. Portfolio equity represented $3,875.35 million or 66.77% of total Quarter Two 2014 Capital Imported, up by $1,614.99 million or 71.45% from $2,260.36 million recorded in the preceding quarter. There was a slightly negative annual growth in portfolio equity inflows of $58.86 million or 1.50%, against the corresponding quarter of 2013, in which portfolio equity represented $3,934.21 million, or 70.03% of total capital imported.
The second greatest investment subsector was portfolio investment in bonds. Representing $731.74 million or 12.61% of total capital imported, the sector grew by $581.01 million or 385.44% year on year, and increased by $249.25 million or 51.66% from the preceding quarter.
Of the total capital imported in t he Second Quarter of 2014, shares continue to attract the most foreign capital into Nigeria. Nonetheless, this value represented a $501.27 million or 12.86% decline in year on year growth, from the $3,897.50 million inflow recorded in corresponding quarter of 2013. Relative to the $2,773.36 million recorded in the opening quarter of 2014 however, shares increased by $622.87 million or 22.46%.
Classified according to Business Type, the year on year growth in total capital imported was in part driven by the Financing sector. Financing represented $723.14 million or 12.46% of the total for the Second Quarter, with growth of $116.19 million or 19.14% recorded from the corresponding quarter of 2013. Capital imported for financing increased by $377.87 million or 109.44% quarter-on-quarter making it the third largest source of capital imported.