Foreign investors take $2.7bn out of Nigeria in three months

Foreign investors took $2.74 billion out of Nigeria in the first three months of 2013. This was indicated by the Central Bank of Nigeria (CBN) in its economic report for the first quarter of 2013. According to the report, foreign exchange outflow from the economy in the first was $6.54 billion.

This outflow was dominated by foreign exchange outflows for ‘invincibles’.  Invincible represents money took out of the economy by foreign investors as dividend payment or liquidation of portfolio investment (bonds, equities, treasury bills).

A top foreign exchange and foreign trade expert who spoke to Vanguard on condition of anonymity said that this development indicate serious capital flight out of the country.

This notwithstanding the economy recorded more foreign exchange inflow than outflow in the first quarter.

The report said, “Provisional data on aggregate foreign exchange flows through the economy indicated that total inflow amounted to US$34.47 billion, representing  an increase of 13.5 and  20.9 per cent above the levels in the preceding quarter  and the corresponding quarter of 2012, respectively. Oil sector receipts, which accounted for  29.1 per cent of the total, stood at US$10. 01 billion, compared with the respective levels of  US$10.09 billion and US$11.63 billion in the preceding quarter  and corresponding  quarter of 2012.

“Non-oil public sector inflows, which accounted for 1.4 per cent  of the total  foreign exchange flows declined significantly by 54.1 per cent below the preceding quarters level, while  autonomous inflow, which accounted for  69.5 per cent, increased by  32.8 per cent above  the preceding quarters.

“At $6.54 billion, aggregate foreign exchange outflow from the economy  Fell by 19.9 and 35.2 per cent below the levels in the preceding quarter and corresponding quarter of 2012, respectively. The fall in outflow, relative to the preceding  quarter,  was accounted for  largely,  by the 49.3  and  72.9 per cent decline  in  other official payments and autonomous sources (imports and invisibles), respectively.

“The invisible sector accounted for the bulk (42.4 per cent) of total foreign exchange disbursed in the first quarter of 2013, followed by industrial sector (18. 9 per cent). Other beneficiary sectors, in a descending order included: mineral and oil sector (15.0 per cent), manufactured products (10.5 per cent), food products (8.9 per cent) , transport sector (3.9 per cent) and  agricultural products (0.4 per cent).

“Foreign Exchange Flows Provisional data on foreign exchange flows through the CBN showed that inflow during the first quarter of 2013 amounted to US$10.50 billion, representing a decline of 6.0 and  13.3 per cent below the levels in the preceding quarter and  the corresponding period of 2012, respectively. “

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