Foreign capital inflow into Nigeria’s oil sector drops by 98%

DThe Nigerian oil and gas industry suffered a significant decline in foreign investment inflow into the country in the first quarter of 2022, as capital importation into the sector dipped by 98.11 per cent to $0.61 million in the period, compared with $32.31 million recorded in the fourth quarter of 2021.

According to the National Bureau of Statistics (NBS), in its Nigerian Capital Importation Report for the first quarter of 2022, quarter-on-quarter, the amount of foreign capital inflow into the oil and gas industry in the first quarter of 2022 was a 98.93 per cent decline compared with the $57.25 million inflow recorded in the first quarter of 2021.

The NBS reported that inflow into the oil and gas industry, which is the lowest in a series of quarters in the last couple of years, accounted for 0.04 per cent of total inflow into the Nigerian economy in the period under review.

In comparison, the NBS noted that in the first quarter of 2021, $57.25 million was imported into the sector, while in the second, third and fourth quarters of 2021, foreign capital inflow of $11.32 million, $0.94 million and $32.31 million, were recorded, respectively.

Also, in 2020, the value of foreign capital imported into the oil and gas sector stood at $10.09 million, $6.55 million, $25.03 million and $11.83 million, in the first, second, third and fourth quarters, respectively.

In general, the NBS said: “The total value of capital importation into Nigeria in the first quarter of 2022 stood at $1.573 billion from $2.188 billion in the preceding quarter, showing a decrease of 28.09 per cent. When compared to the corresponding quarter of 2021, capital importation decreased by 17.46 per cent from $1.906 billion.

“The largest amount of capital importation by type was received through portfolio investment, which accounted for 60.87 per cent

($957.58 million). This was followed by Other Investment with 29.28 per cent ($460.59 million) and foreign direct investment (FDI) accounted for 9.85 per cent ($154.97 million) of total capital imported in the first quarter of 2022.

“Disaggregated by sectors, capital importation into banking had the highest inflow of $818.84 million amounting for 52.05 per cent of total capital imported in the first quarter of 2022. This was followed by capital imported into the production sector, valued at US$223.67 million (14.22 per cent) and the financing sector with $199.37 million (12.67 per cent).

“Capital importation by country of origin reveals that the United Kingdom ranked top as the source of capital imported into Nigeria in the first quarter of 2022 with a value of $1.021 billion, accounting for 64.92 per cent. This was followed by the Republic of South Africa and the United States of America valued at $117.50 million (7.47 per cent) and $82.07 million (5.22 per cent) respectively.”