Nigeria: Capital Importation - 4Q 2016

Transcription

1. Nigerian Capital Importation (Q4 2016) Report Date: February 2017 Data Source: National Bureau of Statistics / Central Bank of Nigeria (CBN)
2. Contents Summary 1 Capital Importation by Type 2 Capital Importation by Sector 4 Capital Importation by State 5 Capital Importation by Country of Origin 6 Infographics 7 Appendix - Tables 24 Methodology and Advice to Users of Our Reports 27 Acknowledgment and Contact 28
3. Capital Importation Data The data on Capital Importation used in this report was obtained from the Central Bank of Nigeria (CBN). The data is compiled using information on Banking transactions, gathered through Electronic Financial Analysis and Surveillance System (e-FASS) software, which enables the automatic reporting of all banking transactions to CBN. E-FASS follows WTO classification systems and covers all registered financial institutions in Nigeria, thus complying with international standards as well as being highly comprehensive. E-FASS data is supplemented by that form customs, through the analysis of declaration forms for physical capital imported. Data is therefore inclusive of both imported physical capital, such as that of plants and machinery, as well as financial capital importation. NOTE: Data is subject to revisions within the quarter subsequent to its release. Finalised data and reports updated accordingly and published online. Summary The total value of capital imported into Nigeria in the fourth quarter of 2016 was estimated to be $1,548.88 million, which represents a decrease of 15.00% relative to the third quarter, and a fall of 0.52% relative to the fourth quarter of 2015. The level of capital imported was similar in each month of the quarter, but the highest was in December, of $555.37 million. The decline relative to the previous quarter was entirely due to a decline in portfolio investment; Foreign Direct Investment (FDI) and Other Investment both increased. The quarterly decline in portfolio investment was mainly due to base effects: there were large investments in money market instruments and bonds in the third quarter, which were not matched in the final quarter. In the year 2016, capital importation fell by 46.86%, from $9.64 billion in 2015 to $5.12 billion. This was the lowest value since the series started in 2007, which reflects the numerous economic challenges that afflicted Nigeria in 2016. The weakening of the naira may have had an impact: a weaker naira means more can be purchased with each dollar, and therefore investment projects requiring naira payments cost less in dollar terms. Portfolio investment fell the most, by 69.81%. This investment type, whereby investors seek quick returns rather than control of management in companies, is most likely to be affected by current market conditions. 1 Nigerian Capital Importation- Q4 2016
4. Foreign Direct investors take a longer-term view , and therefore Nigeria's recession and currency problems may carry less weight in investment decisions. FDI fell by 27.83% between 2015 and 2016, considerably less than portfolio investment. By contrast, Other investment increased between 2015 and 2016, by 3.48%. This was entirely due to an increase in loans. Figure 1: Total Capital Imported ($ billions) Capital Importation by Type Capital Importation can be divided into three main investment types: Foreign Direct Investment (FDI), Portfolio Investment and Other Investments, each comprising various subcategories. In the final quarter of 2016, Other Investment was the largest component of imported capital and accounted for $920.03 million, or 59.40%. This followed a quarterly increase of 63.95%, and a year on year increase of 91.16%. While this is partly the result volatility in the series, the value of Other Investment was nevertheless strong, and has been surpassed by only four previous quarters since 2007. All four subcategories within Other Investment recorded positive investment, in contrast with the previous quarter in which investment was recorded for only Loans and Other claims. However, the majority (99.67%) was 2 Nigerian Capital Importation- Q4 2016
5. Figure 2 : Composition of capital imported, 2016 Q4 The second largest component of capital importation in the final quarter of 2016 was Foreign Direct Investment (FDI). This investment type accounted for $344.63m, or 22.25% of the total. This represented growth of 1.17% relative to the previous quarter, and of 179.83% relative to the same quarter of the previous year, the first year on year growth rate in 5 quarters. However, the latter growth rate was high in part due to a base effect: the value of FDI in the final quarter of 2015 was one of the lowest on record. Of the two subcategories, both recorded positive investment, but there was less than $0.1m of investment in the form of Other Capital, and so FDI – Equity accounted for 99.98% of the total. For the first quarter on record, Portfolio Investment was the smallest component of capital importation, and accounted for $284.22m, or 18.35% of the total. This was the lowest share accounted for by this investment type since the beginning of 2009. Whereas the other types increased relative to the previous quarter (albeit slightly in the case of FDI) Portfolio Investment fell by 69.12%. This was partly due to a spike in Portfolio Investment in the previous quarter, but nevertheless there was also a decline relative to the previous year, of 70.16%. The largest component of Portfolio Investment was – Equity, which accounted for $176.44m, or 62.08% of this investment type. This was the lowest level recorded for the subcategory; portfolio equity investors tend to be primarily concerned with short term profits, and therefore are most likely to be deterred by the recession, and recent currency controversies. Bonds and money market instruments recorded investment of $25.40m and $82.37m respectively, representing significant declines from the unusually high values both subcategories recorded 3 Nigerian Capital Importation- Q4 2016
6. Capital Importation by Sector Capital is either imported in the form of shares , or directly imported by different sectors of the economy. In the final quarter of 2016, the value of share capital imported was $228.24m, which represents a decrease of 64.68% relative to the previous quarter. This led to a large decline in the percentage of capital importation accounted for shares, from 35.47% to 14.74%, the lowest recorded. Share capital investment, which is closely related to Equity investment (FDI and Portfolio) was responsible for most of the increase in capital importation throughout 2012 – 2014, and accounted for much of fall since. The different profiles of share capital and other investment is given in figure 3. Year on year, share capital imported declined by 72.56%. Figure 3: Capital imported, in the form of shares, and by different sectors There were three sectors that accounted for most of the movement in capital imported into different sectors. Banking was the sector to import the largest value of capital in the previous quarter, but following a quarterly fall of $394.22m, or 70.96%, became only the third largest, and imported $161.30m in the final quarter of 2016. By contrast, the Telecommunications sector recorded an increase of $309.45m, which more than doubled the amount of capital imported in the previous quarter to reach $554.25m. 4 Nigerian Capital Importation- Q4 2016
7. This was the largest value of capital imported by any sector in this quarter . The Oil and Gas sector also recorded a large increase, of $155.67m or 90.70%, to reach $327.30m, and became the second largest. Comparing the value of capital imported by these sectors to the value in the final quarter of 2015 reveals even larger increases: Telecommunications and Oil and Gas sectors imported capital worth only $13.22m and $93.37m respectively in this period. Figure 4: Capital imported by key sectors in 2016 Q3 and Q4 ($ millions) Only three sectors to recorded no capital importation in the final quarter of 2016 (Hotels, Tanning and Weaving), one less than in the previous quarter. However, there were a further four sectors to record a value of less than $1 million, which were Consulting, Drilling, Marketing, and IT Services. There were eight sectors to record a decline in the value of Capital relative to the previous quarter. Capital Importation by State The state to import the most capital into Nigeria in the final quarter of 2016 was Lagos, as in all previous quarters. Lagos is the commercial and financial capital of Nigeria, and home to Nigerian Stock Exchange where shares are traded. As such, it accounts for most of the capital imported into the country. In 2016, it accounted for more than 90% of capital importation in nearly all months, although in May it accounted for only 88.08%. Abuja is generally the state to import the second largest quantity of capital, and this was the case for 2016 as a whole. 5 Nigerian Capital Importation- Q4 2016
8. Capital Importation by Country of Origin In the final quarter of 2016 there were 32 different countries that were active in investing in Nigeria . This is two less than in the previous quarter, but less than in the same quarter of the previous year when there were 40 countries from which Nigeria imported capital. The country from which Nigeria imported by far the most capital was the United Kingdom, which accounted for $482.89 million, or 31.18% of the total. This was despite a fall of 56.00% relative to the previous quarter.As well as the existence of an historical relationship between the UK and Nigeria, London (the capital of the UK) is also a key financial centre, which could help to explain the high value of capital importation accounted for by the UK. Since 2010, the UK has accounted for the highest value of capital importation in all but two quarters (both in the second half of 2015). In addition, it was the country primarily responsible for the rise in portfolio investment throughout 2012-2014, in which this type of investment was by far the largest component. In 2016as a whole, the UK also invested the most in Nigeria, with capital worth $2,131.85 million imported from this country, more than twice the value of the next largest investor country. The country to account for the second largest value was the Netherlands, which accounted for $296.52 million, or 19.14% of the total. Although Netherlands has always been a prominent investor in Nigeria, with numerous large companies active, it has been more consistently among the top investor countries in recent years. In 2016 it was the third largest investor country, and made investments worth $516.89 million, behind only the UK and the US, the latter of which invested $945.59 million in the same period. Nevertheless, capital imported from the US was slightly lower than from the Netherlands in the fourth quarter, at $242.46 million. Figure 5: Capital imported by Country of Origin ($ billions) 6 Nigerian Capital Importation- Q4 2016
9. Nigerian Capital Importation – Q4 2016 Capital Importation by Type of Investment- 2016 Foreign Direct Investment Recorded Continuous Growth in 2016 from $174.46mln in Q1 to $344.63 mln in Q4. Portfolio Investment records a significant growth in Q3 to N920.32 mln investment and also recorded a significant drop in Q4 to $284.22mln Other Investments also Recorded Continuous Growth in 2016 from $265.47mln in Q1 to $920.03 mln in Q4. A total value of $1,548.88 mln capital was imported into Nigeria as at Q4 2016 . 7 Nigerian Capital Importation- Q4 2016
10. Nigerian Capital Importation – Q4 2016 Capital Importation by Type of Investment- 2015 Foreign Direct Investment figure fluctuated in 2015. It grew from $394.61lmn in Q1 to $717.72mln in Q3 and later dropped to $123.15mln in Q4. Portfolio Investment dropped from $2,183.15 mln in Q2 to 952.5 mln in Q4 2016. Other Investments also fluctuated in 2016. It grew from $416.34 mln in Q1 to $696.38 mln in Q3 and later dropped to $420.84 mln in Q4. A total value of $1,556.95 mln capital was imported into Nigeria as at Q4 2015 . 8 Nigerian Capital Importation- Q4 2016
11. Nigerian Capital Importation – Q4 2016 Capital Importation by Type of Investment- 2014 Foreign Direct Investment grew from $472.99lmn in Q2 to $768.86mln in Q4. Portfolio Investment also grew from $2,869.19 mln in Q1 to$5,127.75 mln in Q3 but later dropped in Q4. Other Investments grew from $413.76 mln in Q2 to $1,727.79 mln in Q4. A total value of $4,499.74 mln capital was imported into Nigeria as at Q4 2014 . 9 Nigerian Capital Importation- Q4 2016
12. Nigerian Capital Importation – Q4 2016 Summary of Nigerian Capital Importation Year-on-Year The value of capital imported into Nigeria dropped from $4,499.74 mln in 2014 to $1,556.95 mln in 2015. It dropped further in 2016 to $1,548.88 mln. 10 Nigerian Capital Importation- Q4 2016
13. Nigerian Capital Importation – Q4 2016 Capital Importation by Type of Investment-Q1 Portfolio investment dominated capital importation in Q1 2016 with a value of $271.04 mln capital imported. A total value of $710.97 mln capital was imported into Nigeria in Q1 2016 . 11 Nigerian Capital Importation- Q4 2016
14. Nigerian Capital Importation – Q4 2016 Capital Importation by Type of Investment-Q2 Other investment dominated capital importation in Q2 2016 with a value of $520.57 mln capital imported. A total value of $1,042.17 mln capital was imported into Nigeria in Q2 2016 . 12 Nigerian Capital Importation- Q4 2016
15. Nigerian Capital Importation – Q4 2016 Capital Importation by Type of Investment-Q3 Portfolio investment dominated capital importation in Q3 2016 with a value of $920.32 mln capital imported. A total value of $1,822.13 mln capital was imported into Nigeria in Q3 2016 . 13 Nigerian Capital Importation- Q4 2016
16. Nigerian Capital Importation – Q4 2016 Capital Importation by Type of Investment-Q4 Other investment dominated capital importation in Q4 2016 with a value of $920.03 mln capital imported. A total value of $1,548.88 mln capital was imported into Nigeria in Q4 2016 . 14 Nigerian Capital Importation- Q4 2016
17. Nigerian Capital Importation – Q4 2016 Capital Importation by Type of Investment - 2014 to 2016 (Q4 Comparisons) Q4 2014 Q4 2015 Q4 2016 The value of foreign direct investment, porfolio investment and other investments dropped from $4,499.74 in Q4 2014 to $1,548.88 mln in Q4 2016 15 Nigerian Capital Importation- Q4 2016
18. Nigerian Capital Importation – Q4 2016 Capital Importation by Sectors 16 Nigerian Capital Importation- Q4 2016
19. Nigerian Capital Importation – Q4 2016 Capital Importation by Sectors- Q4 Telecoms sector recorded the largest amout of capital imported in Q4 2016 and closely followed by Oil & Gas and Banking. Hotels, Tanning and Weaving sectors recorded no capital importation in Q4 2016 17 Nigerian Capital Importation- Q4 2016
20. Nigerian Capital Importation – Q4 2016 Capital Importation by Country of Origin – 2014 to 2016 Note: Countries with zero values for all quarters have been omitted 18 Nigerian Capital Importation- Q4 2016
21. Nigerian Capital Importation – Q4 2016 Capital Importation by Country of Origin –2014 to 2016 Note: Countries with zero values for all quarters have been omitted 19 Nigerian Capital Importation- Q4 2016
22. Nigerian Capital Importation – Q4 2016 Capital Importation by Country of Origin – 2016 Note: Countries with zero values for all quarters have been omitted 20 Nigerian Capital Importation- Q4 2016
23. Nigerian Capital Importation – Q4 2016 Capital Importation by Country of Origin – 2016 1,097.59 1,042.17 1,822.12 1,548.88 Note: Countries with zero values for all quarters have been omitted 21 Nigerian Capital Importation- Q4 2016
24. Nigerian Capital Importation – Q4 2016 Capital Importation by Country of Origin – Q4 Nigeria imported the most capital from the United Kingdom, which accounted for $482.89 million, or 31.18% and closely followed by Netherlands and the United States. 22 Nigerian Capital Importation- Q4 2016
25. Nigerian Capital Importation – Q4 2016 Capital Importation by Country of Origin – Q4 23 Nigerian Capital Importation- Q4 2016
26. Appendix 24 Nigerian Capital Importation- Q4 2016
27. 25 Nigerian Capital Importation- Q4 2016
28. 26 Nigerian Capital Importation- Q4 2016
29. Methodology and Advice to Users of Our Reports Methodology Data is supplied administratively by the Central Bank of Nigeria (CBN) and verified and validated by the National Bureau of Statistics, Nigeria (NBS). ADVICE TO USERS OF THIS REPORT You are given the limited right to print this report and to distribute it by any means. You can print out pages and share/use them in your private discussion groups as long as you acknowledge NBS and you do not alter the report in any way. NBS is not responsible for any errors, omissions or representations on any of the pages in this report. Our report, opinions and analysis are based on best practice methodology and sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. The information in this report is updated from time to time. We encourage everyone to use the information in the report as a resource only to further their own research on all featured entities. This material is based upon information that we consider reliable, credible and factual but we do not represent that it is accurate or complete, as such. Any information, opinions, advice or offers posted by any person or entity logged in to the NBS's website associated sites is to be construed as public conversation only. In delivering this report, the NBS works with and through organisations with distinct service competencies in data presentation. NBS takes extra steps to ensure that information provided by it are accurate, fact checked and validated for compliance with internationally acceptable standards and practices. While this report is checked for accuracy, we are not liable for any incorrect information included. We are always happy to receive your comments on how we can improve on this report. Should you be interested in contacting us for further discussions on how such reports can be made more meaningful to you or your organization? Kindly contact feedback@nigerianstat.gov.ng 27 Nigerian Capital Importation- Q4 2016
30. Acknowledgements /Contacts Acknowledgements We acknowledge the contributions of our strategic partner the Central Bank of Nigeria and our technical partner, Proshare in the design, concept and production of this publication. Contact Us @nigerianstat Head Office Address Plot 762,IndependenceAvenue,Central NBSNigeria +234 803 386 5388 www.nigerianstat.gov.ng feedback@nigerianstat.gov.ng Business District,FCT, Abuja Nigeria. 28 Nigerian Capital Importation- Q4 2016