Investment Inflow Into Nigeria Shrinks By $4.5bn - Business

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Investment Inflow Into Nigeria Shrinks By $4.5bn - Business - Nairaland

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Investment Inflow Into Nigeria, Others To Hit $75bn – Osinbajo / Investment Inflow Into Nigeria Rises By 95% To $1.7bn / Investment Inflow To Nigeria Drops To 10-year Low (2) (3) (4)

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Investment Inflow Into Nigeria Shrinks By $4.5bn by Truth234(m): 2:49am On Dec 22, 2016

The level of investment inflow into the country recorded a huge decline of $4.51bn from the $8.08bn in the first nine months of 2015 to $3.57bn in the same period of 2016, an analysis of the capital importation report obtained from the National Bureau of Statistics revealed.

The report, which was obtained by our correspondent in Abuja on Wednesday, showed that the decline of 55.2 per cent was as result of the harsh economic climate.

A breakdown of the inflow revealed that $710m investment was indicated in the first quarter of this year, while the second and third quarters had $1.04bn and $1.82bn, respectively.

These are against the $2.67bn, $2.66bn and $2.74bn recorded in the corresponding periods of the 2015 fiscal year.

The report attributed the huge decline in capital importation to what it described as the symptoms of the challenging period that the Nigerian economy was going through following the fall in crude oil prices.

It stated that while there were a number of reasons why the amount of capital imported in recent years had been higher than usual, the drop between last year and this year suggested that there were further reasons why Nigeria had attracted less foreign investments in recent quarters.

The report stated, “Investors may be concerned about whether or not they will be able to repatriate the earnings from their investments, given the current controls on the exchange rate.

“In addition, as growth has slowed in recent quarters, there may be concerns about the profitability of such investments.”

In terms of the composition of the investment inflow, the report revealed that the largest component of capital importation in the nine-month period was portfolio investment, attracting a total sum of $1.52bn.

This was followed by “other investments, with $1.35bn, and foreign direct investment, with $699.39m.”

A breakdown of the $1.52bn portfolio investment showed that equity accounted for $682.6m; bonds, $370.5m; and money market instruments, $475.55m.

The report added, “The relatively strong growth in portfolio investment meant it regained its position as the largest investment type, and it accounted for 50.51 per cent in the third quarter, compared to 18.69 per cent and 30.80 per cent for other investments and the FDI, respectively.

“Year-on-year growth rates remained negative; the FDI, portfolio and other investments declined by 52.54 per cent, 8.80 per cent and 45.05 per cent, respectively compared to the third quarter of 2015.

“In the case of the FDI and other investments, however, this was partly the result of a base effect, as there was a spike in the value of the FDI equity in the third quarter of 2015.

“Nevertheless, it is also possible that the weaker growth in the economy in the first half of 2016 has had an impact on the value of capital importation.”

http://investorsking.com/investment-inflow-into-nigeria-shrinks-by-4-5bn/

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Sibrah: 3:03am On Dec 22, 2016

That mean less $$ to sell to importers. These are the real factors that made dollar price go up and not any policy.

3 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Truth234(m): 3:33am On Dec 22, 2016

Sibrah:
That mean less $$ to sell to importers. These are the real factors that made dollar price go up and not any policy.

The CBN is just hurting the masses with its infective monetary policy, the interest rate raised by 200 basis points to 14 percent to lure foreign investors to the economy without due consideration for global economics was wrong. After 6 months, FDI has dropped by over 50%, yet local businesses are struggling to pay 14 percent interest on their loans and still buy forex at 470-490 a dollar. The question is what is the essence of the high rate if all we need is to knock-off high unemployment rate and put money in the hands of the masses to increase consumer spending and redress the current economic situation.

Another thing is the CBN is approaching current inflation like a demand pull inflation, whereas it is a cost push inflation. Once costs of production moderate ( through low-interest rate and subsidy), the inflation rate will adjust automatically.

11 Likes 1 Share

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Sibrah: 3:53am On Dec 22, 2016

^^^
Your arguement appears valid, but I tell you that there are other factors mitigating against local businesses. Take power for example, its unavailability and high cost is making local product unattractive in intl market. The investors see these things and know that our cost of power supply is linked to Naira strength. Investors don't base their decision completely on interest rates to local business. My point is CBN and FG policies is largely unconnected to what people blame them for.

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Truth234(m): 6:16am On Dec 22, 2016

Sibrah:
^^^
Your arguement appears valid, but I tell you that there are other factors mitigating against local businesses. Take power for example, its unavailability and high cost is making local product unattractive in intl market. The investors see these things and know that our cost of power supply is linked to Naira strength. Investors don't base their decision completely on interest rates to local business. My point is CBN and FG policies is largely unconnected to what people blame them for.

You probably didn't see or understand what I meant by global economics. You can't formulate monetary policy without due consideration for global happenings. For instance, CBN and FG introduced forex flexibility policy three days to Brexit referendum, exactly the same period the US federal reserve held its monetary policy unchanged citing Brexit uncertainty. Yet, CBN did exactly opposite to a mono-product economy and expect foreign investors to jump on it because it has adjusted its forex policy.

Result, epic fail, global investors assess risk associated with their intended investment, no reasonable investor will jump in an economy with intermittent attacks, in fact, oil investors are basing their 2017 forecast on the possibility of Nigeria and Libya output dropping hundred of thousands. Yet, FG set its benchmark output at 2.2 mbpd, this is a government that has not produced at that level for the past 7 months and currently producing at 1.7mbpd. How can you build your budget around projected figures?

Bros, everything the people blame them for, they are guilty.

14 Likes 1 Share

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Nobody: 8:08am On Dec 22, 2016

As expected

1 Like

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Martinola(m): 8:10am On Dec 22, 2016

free falling, jst lyk pack of sticks

1 Like

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Okundaye4(m): 8:11am On Dec 22, 2016

Lol

1 Like

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by PIPPROF(m): 8:11am On Dec 22, 2016

its called change

sai boohary

5 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by NaijaMutant(f): 8:11am On Dec 22, 2016

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by bsonenterprise: 8:11am On Dec 22, 2016

The Obama government poured about $23 trillion into a host of several programs to pull the US from the 2007/2008 Financial Melt-Down. Bank interest rate was reduced as low as 2%, Small Medium Scale Business was extremely empowered, even Donald Trump declared bankruptcy and was bailed out by the US government. The US Auto Industry, and other big and small businesses were given a financial life line by the US government...to keep them living, and get them to bounce back. Today, all these businesses have paid the US government back all they borrowed with interests. This is a country with Infrasctures we wont have in the next 100 years if we keep developing on daily basis, and with better financial systems and over $50 trillion solid foreign reserve...

How much has the Buhari war on corruption generated so far? roughly 600 Billion Naira from GEJ and his Muskeeters? Less than $1.35 Billion USD. This same war against corruption killed our economy, the EFCC/DSS chased away every single real investor we have. I even heard, you either sell your properties in Abuja fast, before the EFCC/DSS starts asking question how you came about it and confiscate it? Imagine! Even Banks were battered, and assaulted by these clueless dolts, and once more, how much was recovered and how much did we lose in the battle against corruption? Isn't this a classic term of Phyrric Victory? A useless and meaningless and fake victory! And now, how much has the current Senate, and Northern Political Toads stolen from Buhari Government? Over a trillion in form padded budgets, and inflated contracts. I voted Buhari, but I see him asphyxiating this economy by the time he hands over due to his ancient, and medieval solutions. I was just reading about a Buhari aid who stashed over $1million in his house. LOl.

I think its time to stop bothering about the Nigerian economy while this loser still leads the country and The best Business Advice I could offer anybody right now is to buy as much Bitcoin, Dollars, Euro, Pounds Sterlings, and hoard them somewhere extremely safe, maybe in a savings in London - I am doing a count down to the moment the Naira will REALLY REALLY fall like the useless mothfuvker Buhari has reduced it.
The Nigerian Economy funeral is days away! I dont care anymore. It's time to profit from this useless government in the ways I know I can...

12 Likes 3 Shares

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by clydedaniels(m): 8:11am On Dec 22, 2016

I would shrink further. Untill Mmm returns grin

1 Like

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Emekamex(m): 8:12am On Dec 22, 2016

Sibrah:
That mean less $$ to sell to importers. These are the real factors that made dollar price go up and not any policy.

Your level of zombiesm is described below.

12 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by NaijaMutant(f): 8:13am On Dec 22, 2016

Sibrah:
That mean less $$ to sell to importers. These are the real factors that made dollar price go up and not any policy.

Just shut up already

5 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by godunia(m): 8:15am On Dec 22, 2016

When you make a Commissioner Minister of Finance at a point when our beloved country needs CHANGE, what do you expect?

4 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by otukpo(f): 8:16am On Dec 22, 2016

APC government has finished this country.

5 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Gofwane(m): 8:17am On Dec 22, 2016

Can anything good (economy-wise) ever come out of this country?

3 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by MarshRiley(m): 8:22am On Dec 22, 2016

Government policies are largely to be blamed for this, I wonder what our economy teams are doing,Trump already has plans of wooing investors into the country to boost their economy,while our own government and CBN are making sure that investors run from our market

6 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by TheRealestGuy(m): 8:28am On Dec 22, 2016

Sibrah:
That mean less $$ to sell to importers. These are the real factors that made dollar price go up and not any policy.

And what do you think caused these factors if not for useless and poorly thought out policies?

4 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by TheRealestGuy(m): 8:33am On Dec 22, 2016

Truth234:

You probably didn't see or understand what I meant by global economics. You can't formulate monetary policy without due consideration for global happenings. For instance, CBN and FG introduced forex flexibility policy three days to Brexit referendum, exactly the same period the US federal reserve held its monetary policy unchanged citing Brexit uncertainty. Yet, CBN did exactly opposite to a mono-product economy and expect foreign investors to jump on it because it has adjusted its forex policy.

Result, epic fail, global investors assess risk associated with their intended investment, no reasonable investor will jump in an economy with intermittent attacks, in fact, oil investors are basing their 2017 forecast on the possibility of Nigeria and Libya output dropping hundred of thousands. Yet, FG set its benchmark output at 2.2 mbpd, this is a government that has not produced at that level for the past 7 months and currently producing at 1.7mbpd. How can you build your budget around projected figures?

Bros, everything the people blame them for, they are guilty.

Bro, you're wasting your time, that guy is a zombie...

5 Likes

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by omonnakoda: 8:39am On Dec 22, 2016

Truth234:

You probably didn't see or understand what I meant by global economics. You can't formulate monetary policy without due consideration for global happenings. For instance, CBN and FG introduced forex flexibility policy three days to Brexit referendum, exactly the same period the US federal reserve held its monetary policy unchanged citing Brexit uncertainty. Yet, CBN did exactly opposite to a mono-product economy and expect foreign investors to jump on it because it has adjusted its forex policy.

Result, epic fail, global investors assess risk associated with their intended investment, no reasonable investor will jump in an economy with intermittent attacks, in fact, oil investors are basing their 2017 forecast on the possibility of Nigeria and Libya output dropping hundred of thousands. Yet, FG set its benchmark output at 2.2 mbpd, this is a government that has not produced at that level for the past 7 months and currently producing at 1.7mbpd. How can you build your budget around projected figures?

Bros, everything the people blame them for, they are guilty.

There is no coherence in your argument just self indulgent hot air. Rather than spew bombast tell us concrete proposals.

Interests rates have always been relatively high in Nigeria and one can safely say the monetary policy is not the issue here. Nigeria is highly dependent on imported goods just like Venezuela and so a sharp drop in oil prices will cause problems.
Monetary policy will not change that. There is no short term solution. The only possible game changer in the short term is a sharp increase in oil prices.
Or we can go down the Abacha road and severel restrict imports to "protect" the naira.I doubt the success of that approach.
Foreign Investors have not made any impact on the lives of ordinary people in good times so it is not really relevant to the MicroEconomics in Nigeria

The stuff about Global politics ,honestly it is academic nonsense with no practical relevance.
The number one factor in Nigeria is oil prices ,number two is electricity if those two things are favorable the economy will do well.

In the medium to longer term the strategy has to be diversification and industrialization. There is little the CBN can do about these factors.

What the CBN can and should be criticized for is the conflicting signals it has been giving on Forex policy and not monetary policy.
Those things like Brexit are not Global Economic that is politics with short term economic impact with little significance for us

1 Like 1 Share

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Nobody: 9:07am On Dec 22, 2016

And mmm has packed all our money away... cheesy

in Economics we call this leakage.

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by gunther6(m): 9:12am On Dec 22, 2016

Foreign investors are not fools, you cannot have 6 different exchange rates and expect to attract investments. You cannot bring your dollar in at #305 official rate and change your naira to dollar at #490 wiping out all your margins.
A more in depth analysis of data will reveal that most of this 'foreign investments' are made by the Nigerian diaspora not in the real sector of the economy but mostly to fuel a property bubble that will burst no so long into the future.

6 Likes 1 Share

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by temhab(f): 9:37am On Dec 22, 2016

Nigeria I hail thee

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by EINSTEINPG: 10:01am On Dec 22, 2016

Sibrah:
^^^
Your arguement appears valid, but I tell you that there are other factors ~~mitigating~~ militating against local businesses. Take power for example, its unavailability and high cost is making local product unattractive in intl market. The investors see these things and know that our cost of power supply is linked to Naira strength. Investors don't base their decision completely on interest rates to local business. My point is CBN and FG policies is largely unconnected to what people blame them for.

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Sibrah: 10:10am On Dec 22, 2016

EINSTEINPG:

miligating?
Please what's the meaning of that?

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by EINSTEINPG: 10:34am On Dec 22, 2016

Sibrah:
~~miligating?~~ militating?
Please what's the meaning of that?

mitigate: to make (something) less severe, harmful, or painful.
Usage: mitigate is sometimes used as an intransitive (followed by against) where militate might be expected. Even though Faulkner used it <some intangible and invisible social force that mitigates against him--William Faulkner> and one critic thinks it should be called an American idiom, it is usually considered a mistake.
So based on your intended context; "militating" is the suitable word.
NB: to militate against something: to make that thing less likely to happen or succeed.

1 Like

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by Ahmeduana(m): 11:31am On Dec 22, 2016

STILL, SOME DECENDANT OF BADLUCK SAID THEY DON'T NEED THE GOODLUCK OF JONATHAN, SURPRISING! THEY SHOULD CONTINUE WITH THE BADLUCK OF BUBU.

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by omonnakoda: 12:08pm On Dec 22, 2016

gunther6:

A more in depth analysis of data will reveal that most of this 'foreign investments' are made by the Nigerian diaspora not in the real sector of the economy but mostly to fuel a property bubble that will burst no so long into the future.

This is speculation which is completely without foundation. There is very little of a so called property market in Nigeria. People who invest in property more often build their own but there is no evidence that investment in property accounts for the greater part of diaspora investment. Such data is just not available

Re: Investment Inflow Into Nigeria Shrinks By $4.5bn by buffalowings: 2:20pm On Dec 22, 2016

Hehe
I thought investors are tripping over themselves come to Nigeria

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