In 2023, Nigeria’s banking sector experienced a notable decline in foreign capital inflow, receiving approximately $832.64 million, marking a 60 percent decrease from the previous year.
The National Bureau of Statistics’ latest capital importation report reveals a detailed analysis, highlighting the first quarter as the peak period with an influx of $304.56 million, followed by the fourth quarter contributing $283.30 million, representing 26.03 percent of the total capital importation for that period.
Quarterly breakdown shows the second quarter receiving $194.58 million, while the third quarter underperformed with only $50.20 million in foreign capital.
CitiBank Nigeria Limited led in attracting foreign capital throughout the year, amassing over $1.03 billion, with the highest inflow occurring in the first quarter ($424.13 million).
Stanbic IBTC Bank followed closely with $919.32 million, reaching its peak in the fourth quarter, and First Bank of Nigeria secured $447.69 million, achieving its highest inflow in the second quarter.
Despite the banking sector’s diminished performance in 2023 compared to the previous year, it remained a significant recipient of foreign capital.
Oluseye Olusoga, CEO of Parthian Partners, emphasized the pivotal role of financial services in the economy, stating that the inflow signifies the potential for the banking sector to provide essential liquidity.
Looking optimistically, he anticipates the flow of foreign funds to eventually reach the manufacturing sector.
For the fourth quarter, total capital importation into Nigeria reached $1.09 billion, a 2.62 percent increase from Q4 2022.
Other investments, including trade credits, loans, currency deposits, and claims, dominated with 54.64 percent ($594 million), followed by portfolio investment at 28.46 percent ($309 million) and foreign direct investment at 16.90 percent ($183.97 million).
The production/manufacturing sector emerged as the leading recipient of foreign capital in Q4 2023, securing $450.11 million, constituting 41.35 percent of the total capital imported.
The banking sector followed at $283.30 million (26.03 percent), and financing at $135 million (12.46 percent).
The majority of capital inflows originated from the United Kingdom, Mauritius, and the Netherlands.
In terms of destination, Lagos State retained its position as the top choice in Q4 2023, attracting $771 million, followed by Abuja and Rivers State.
