Nigeria lost $408.28 million (about N148.002 billion) in capital flight arising from plunge in Foreign Direct Investment (FDI) between June and September 2019 owing to insecurity in the land.
This translates to over 45% drop when compared to the figure posted the quarter before.
Okwu Nnanna, Deputy Governor Economic Policy, Central Bank of Nigeria (CBN), gave the revelation Tuesday in Lagos at the sixth national economic outlook session put together by the Chartered Institute of Bankers of Nigeria (CIBN).
According to him “insecurity and the tepid recovery following the fall in oil prices – a trigger to the 2016 recession – have slowed investor appetite. Thus, foreign direct investments, which have been on the slide since 2011, fell to $498.62m in Q3 2019 from $906.9m in Q2.
“Similarly, portfolio inflow declined to $2.59bn in Q3, from $4.46bn in Q2 2019. Hot money is volatile and is subject to sudden reversal at the slightest swings in sentiment.”
The $1.87 billion plunge in portfolio inflow translates to about N678 billion loss of foreign portfolio investment (FPI) in the country in just three months.
The CBN deputy chief went further to say that up till 8th January this year, the external reserves could meet twelve month import obligations comfortably.
He observed that the primary obstacle that could stand in the way of macroeconomic stability was absence of fiscal buffers and Nigeria’s escalating unemployment level.
Nnanna nevertheless stated that the recent hike in Value Addedd Tax (VAT) rate and Sundry Stamp Duty was a right decision by government.