Nigeria faced a significant setback in the third quarter of 2023 as foreign capital from BRICS nations experienced a sharp decline of 59.84 per cent, according to the latest Capital Importation report by the National Bureau of Statistics (NBS).
The quarterly analysis reveals a substantial drop in capital inflow, plummeting from $239.18 million in Q2 2023 to a mere $96.04 million in Q3 2023, marking a drastic 60.35 per cent decrease. This downturn is part of a broader trend, with a year-on-year decrease of 17.57 per cent compared to the same quarter in the previous year, which saw a capital inflow of $116.51 million.
BRICS, consisting of Brazil, Russia, India, China, and South Africa, collectively witnessed a reduction in capital inflow to Nigeria during this period. Despite Nigeria’s strategic pursuit of BRICS membership to bolster its global influence, the nation experienced exclusion as BRICS expanded to include six additional countries, namely Saudi Arabia, Iran, Egypt, Argentina, Ethiopia, and the United Arab Emirates.
The United Arab Emirates (UAE) emerged as an unexpected leader in capital imports to Nigeria, contributing $48.78 million, approximately 50.79 per cent of the total capital inflow from BRICS countries. This is noteworthy, considering the visa ban imposed on Nigeria by the UAE since October 2022.
Out of the 10 countries in the BRICS group, Nigeria received foreign capital from only five, namely China, India, South Africa, Saudi Arabia, and the UAE. In Q3 2023, South Africa contributed $34.03 million, China $11.12 million, India $1.70 million, and Saudi Arabia $0.14 million.
The overall foreign capital inflow into Nigeria witnessed a substantial drop, totaling $654.65 million in Q3 2023. Foreign Direct Investment (FDI) represented a meager 0.091 per cent of the total capital imported, underscoring the challenges in attracting substantial investments despite government efforts.
President Bola Tinubu secured a notable economic deal in 2023 with Saudi Arabia, where the Gulf State pledged assistance with Nigeria’s foreign exchange obligations and committed to invest in the country’s refinery rehabilitation process.
Despite the challenges depicted in the current capital importation report, optimism is directed towards the potential positive impact of foreign investment pledges secured by President Tinubu during overseas trips.
These pledges reportedly amount to over $15 billion in Foreign Direct Investment (FDI) across various sectors. As Nigeria navigates its economic landscape, the outlook remains contingent on realising these pledges and making concerted efforts to enhance foreign capital inflows, including the aspiration to join the BRICS group.
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