Nigeria received less money from foreign countries in April 2024, amounting to $770 million.
This amount is 57.22% less than the $1.80 billion received in March 2024, according to the Central Bank of Nigeria’s (CBN) April 2024 Monthly Economic Report.
The report says the drop happened mainly because fewer people invested in certain types of financial tools called money market instruments.
It stated: “There was a lower amount of foreign money coming into the country in April, mainly because fewer people invested in money market instruments. The foreign capital brought into the economy dropped to $0.77 billion from $1.80 billion in March 2024.”
Drop in Portfolio Investment
One big reason for this drop was that portfolio investments went down to $330 million from $1.16 billion in March. Investors were not buying money market instruments as much.
Similarly, other types of investment like loans also went down. Loans fell to $430 million from $620 million the previous month.
Foreign direct investment (FDI) also dropped, going down to $10 million from $20 million in March because there were fewer equity investments.
When looking at what types of foreign money came in, other investments made up the biggest share at 55.84%. Portfolio investments came next at 42.71%, and direct investments were only 1.45%.
This shows that Nigeria relies a lot on loans and other non-stock investments, which can change quickly based on the world’s financial situation.
Banking Sector Takes the Lead
The report also shows which sectors got the most foreign money. The banking sector got the most, with 70.46% of the total foreign money.
Trading followed with 12.89%, then production/manufacturing at 5.77%, telecommunications at 4.94%, and shares at 4.35%. The rest went to various other sectors.
Lagos is on Top
- Geographically, Lagos State got the most foreign money, with 83.13% of the total. The Federal Capital Territory (FCT) got the remaining share.
- Looking at where the money came from, the United Kingdom was the biggest contributor, giving 54.59% of the total.
- South Africa was next with 13.22%, then Mauritius with 9.22%, the Netherlands with 6.57%, the United Arab Emirates with 5.77%, and the United States with 3.44%.
Important Things to Know
While there was less money coming into Nigeria, there was more money leaving the country. The amount of money leaving Nigeria was higher than the amount coming in for April 2024.
Newslodge earlier reported that Nigeria saw a big increase in money leaving the country, totaling $1 billion in April 2024. This is 35.14% more than the $740 million that left in March 2024.
Most of this increase was because of capital reversals, which made up 78% of the total money leaving, amounting to $780 million.
Capital reversal happens when foreign investors take their money out of a country, often due to economic instability, changes in government policies, or better investment opportunities elsewhere.
This can involve selling stocks, bonds, or other financial assets and moving the money back to the investor’s home country or to another place seen as safer or more profitable.
Newslodge noted that capital reversals were more than the total foreign money leaving in May 2024.
However, Nigeria’s total foreign money coming in rose by 210.16% in the first quarter of 2024, going from $1.08 billion in the last quarter of 2023 to $3.37 billion in the first part of 2024. This is according to the National Bureau of Statistics (NBS) capital importation report for the first quarter of 2024.
When compared to the same time in 2023, the foreign money coming in increased by 198.06% in the first quarter of 2024.