According to data released by the National Bureau of Statistics (NBS), Nigeria’s capital importation contracted by 20% last year, dropping from $6.7 billion in 2021 to $5.33 billion. The impact of the country’s general election on capital inflow is more felt in the Q4 performance, with Nigeria attracting $1.06 billion in Q4, 51.51% lower than the $2.19 billion recorded in Q4 2021. Rising business risk, insecurity, recent political risk, and foreign exchange market rigidity, including the high arbitrage between official and black markets, have been attributed to the recent fall in capital importation. Lagos accounted for 68% of the inflow, with the Federal Capital Territory (FCT) recording $1.63 billion, equivalent to 31%. Production, banking, and telecommunications accounted for the bulk of the capital, which went into Nigeria’s economy. An economist, Eze Onyekpere, believes the uncertainty that surrounded the 2023 elections and the likely policy direction of the new administration were key reasons for the poor performance of capital inflow, but there could be a likely rebound if the new administration pursues a policy direction that investors consider favorable.
