Stanbic IBTC Bank Plc has received the highest capital importation into Nigeria in the first quarter (Q1) 2024 with $1,257.38 million (37.24 percent), followed by Citibank Nigeria Limited with $547.71 million (16.22 percent) and Rand Merchant Bank Plc with $528.73 (15.66 percent).
Standard Chartered Bank brought in $399.41 million, showcasing its continued influence and trustworthiness in the eyes of global investors, as Access Bank received $278.18 million, rounding out the list of top-performing banks in terms of capital importation for the quarter.
Other banks, including First Bank and Zenith Bank, had $98.71 million and $96.98 million, respectively.
The solid performance of these banks is a positive indicator for Nigeria’s economic stability and growth prospects.
Stakeholders believe that the capital inflows into the banking sector show that foreign investors are optimistic about the country’s financial institutions and their ability to manage and grow investments effectively.
The National Bureau of Statistics’ (NBS) report on Nigeria’s capital importation for the first quarter of 2024 emphasises the indispensable role of the banking sector in driving Nigeria’s economic development.
The inflows into banks are likely to facilitate increased lending, support business expansions and stimulate economic activities across various sectors
Experts say the banking sector is playing a big role in attracting foreign investments, with the sector receiving the highest capital inflow, as revealed by the NBS report.
The report showed that the banking sector was the leading recipient of foreign capital, attracting $2,067.44 million. This represents 61.24 percent of the total capital imported into the country during this period.
Analysts from Lagos-based Afrinvest (West) Africa Limited observed that banking (61.2 percent) attracted the most, followed by trading (14.7 percent) and Production (5.7 percent).
“This is the first time since Q1:2023 that banking would lead other sectors. We opine that the inflows into the banking sector partly reflect the impact of improved OMO issuances.
The rise in trading contribution to $494.5 million (surpassing previous high of $311.2 million in Q4:2021) could be attributed to attraction of Nigeria’s exports due to weaker Naira.
“This submission is further validated by upbeat in Q1:2024 Foreign Trade Statistics in which trade surplus rose to N6.5 trillion, surpassing 2023 year high of N5.1 trillion. In terms of distribution, capital inflows were limited to three states: Lagos ($2.8 million), Abuja ($593.6 million) and Ekiti ($1.275). This underscores the amount of reforms subnational governments need to implement (in support of efforts by the Federal Government) to make their state investment friendly if they ever intend to be fiscally independent,” the analysts stated in a note to clients.
According to the statistics office, in Q1 2024, total capital importation into Nigeria stood at $3,376.01 million, higher than $1,132.65 million recorded in Q1 2023, indicating an increase of 198.06 percent. In comparison to the preceding quarter, capital importation rose by 210.16 percent from $1,088.48 million in Q4 2023.
Portfolio investment ranked top with $2,075.59 million, accounting for 61.48 percent, followed by other investment with $1,181.25 million, accounting for 34.99 percent. Foreign Direct Investment recorded the least with $119.18 million (3.53 percent) of total capital importation in Q1 2024.
Capital importation during the reference period originated largely from the United Kingdom with $1,805.83 million, showing 53.49 percent of the total capital imported. This was followed by Republic of South Africa with $582.34 million (17.25 percent) and the Cayman Islands with $186.21 million (5.52 percent).
Out of the three states that recorded capital importation during the quarter, Lagos State remained the top destination with $2,782.41 million, accounting for 82.42 percent of the total capital imported. Abuja (FCT) followed with $593.58 million (17.58 percent) and Ekiti State with $0.01 million.
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