The National Bureau of Statistics (NBS), the national agency responsible for the development and management of official statistics, and the authoritative source and custodian of official statistics in Nigeria, on December 6, 2024, released the capital importation report for Q3 2024.
According to data released by NBS in the report, in Q3 2024, total capital importation into Nigeria was $1.252 billion.[1] The figure represents the influx of external resources into the local capital resources for investment, trade, and business production.
KEY HIGHLIGHTS
Portfolio Investment ranked top with $899.31 million, accounting for 71.79% of the total capital importation, followed by Other Investments (comprising loans, currency deposits, and other claims) with $249.53 million, accounting for 19.92% of the total capital importation. Foreign Direct Investment recorded the least with $103.82 million (8.29%) of total capital importation in Q3 2024. Capital Importation in the period under review originated largely from the United Kingdom with $502.60 million, showing 40.12% of the total capital imported.
CAPITAL IMPORTATION BY INVESTMENT TYPE IN Q3
Capital Importation is divided into three main investment types: Foreign Direct Investment (FDI), Portfolio Investment, and Other Investments, each comprising various sub-categories
1. Foreign Direct Investment (FDI)
A total of $103.82 million was imported through FDI (comprising equity and other forms of capital) in Q3, with equity accounting for the vast majority of this investment type ($97.12 million). Other forms of capital accounted for $6.71 million. FDI includes investments made to acquire a lasting management interest and at least 10% of equity shares in an enterprise operating in another country other than that of the investor’s country. This can be by way of acquiring voting stock, mergers and acquisitions, joint ventures, or starting a subsidiary of a domestic firm in a foreign country.
Notable FDI Investments in Q3 2024
₦342 Billion Equity Injection by Heineken NV into Nigerian Breweries
Nigerian Breweries, Nigeria’s largest brewer, received shareholders’ approval to raise ₦600 billion in new equity funds, out of which majority shareholders, Netherlands-based Heineken NV, provided ₦342 billion.
Acquisition of Diageo’s Majority Interest in Guinness Nigeria by Tolaram: Singapore-based conglomerate, Tolaram, in September 2024, completed the acquisition of Diageo’s 58.02% shareholding in Guinness Nigeria Plc for ₦64 billion.[2] The company also entered into a long-term license and royalty agreement, for the continued production of the Guinness brand and locally manufactured Diageo ready-to-drink and mainstream spirits brands.
Prudential Plc Acquisition of Minority Shares in Zenith Prudential Insurance Limited
British Group, Prudential Plc, through its Nigerian subsidiary, Prudential Live Vault Limited, acquired the remaining minority shareholding in Prudential Zenith Life Insurance (‘PZL’), its joint venture business in Nigeria.[3] Prudential originally purchased a 51% stake in Zenith Life Insurance Limited in Nigeria in 2017, which benefited from an existing bancassurance partnership with Zenith Bank. The transaction sees Prudential Plc acquire the remaining 49% of the equity held by Veritas Registrars Limited (formerly Zenith Registrars Limited), making it a 100% owner of PZL in Nigeria.
2. Portfolio Investment
In the quarter under review, a total of $899.31 million in capital was imported through portfolio investment (comprising equity, bonds, and money market instruments). Foreign portfolio investment (FPI) is the acquisition of financial assets by investors outside Nigeria, such as stocks, bonds, and money market instruments in Nigeria to diversify their portfolios. Unlike direct investments, FPIs generally do not confer management control over the assets. In Q3, $84.69 million in capital was realized through the sale of stocks (equity), $69.97 million from bonds, and $744.47 million from money market instruments (treasury bills, commercial papers, etc.)
Notable Portfolio Investments in Q3
FG $500 Million Domestic Dollar Bond
The Federal Government, in the quarter under review, issued its $500 million domestic dollar bond,[4] raising about $900 million from local and international investors.
Public Offer and Rights Issue
During the quarter under review, several Nigerian companies raised capital by offering shares to both new and existing shareholders through public offers and right issuance, attracting investments from local and international investors. Notably, three tier-1 banks were active in the capital market during the quarter as part of their efforts to comply with the recapitalization policy of the Central Bank of Nigeria. GTCO Plc launched a public offer to raise ₦400.5 billion,[5] Zenith Bank Plc launched a combination of public offer and rights issue (N290 billion) [6], while Access Holdings Plc launched a ₦356 billion rights offer[7]. Worthy of mention is the ₦599.1 billion rights issue by the drink makers, Nigerian Breweries Plc, the largest rights issue by proceeds in the history of the Nigerian capital market.[8]
CBN Treasury Bills
The Central Bank of Nigeria sold a total of ₦1.56 trillion in treasury bills in Q3.[9]
3. Other Investments
This comprises loans, currency deposits, and other claims. $252 million was imported through foreign loans, currency deposits accounted for $0.03 million, and $14 million was realized through other claims.
CAPITAL IMPORTATION BY BANKS
In the quarter under review, 20 banks facilitated the inflow of foreign investments into Nigeria. Foreign affiliated Banks facilitated a greater share of the capital importation recorded in the Quarter. Standard Chartered Bank Nigeria Limited received the highest capital importation into Nigeria in Q3 2024 with $385.62 million (30.78%), followed by Stanbic IBTC with $382.08 million (30.50%), Citibank with $192.88 million (15.40%, and Rand Merchant Bank with $141.02 million (11.26%). Access Bank facilitated the highest capital importation into Nigeria ($51.81 million) by a Nigeria bank in Q3 2024.
CAPITAL IMPORTATION BY SECTOR
A sectoral review of the report by the NBS, reveals that the banking sector recorded the highest inflow in the quarter with $579.48 million, representing 46.26% of total capital imported in Q3 2024, followed by the Financing sector, valued at $294.55 million (23.51%), and Production/Manufacturing sector with $189.22 million (15.11%). Notably, the oil and gas sector recorded NIL capital importation in the quarter.
CAPITAL IMPORTATION BY COUNTRY OF ORIGIN
Capital Importation in the period under review originated largely from the United Kingdom with $502.60 million, showing 40.12% of the total capital imported. This was followed by the Republic of South Africa with $185.03 million (14.77%), the United States with $163.86 million (13.08%), the Netherlands with $121.92 million (9.73%), and Mauritius with $97.63 million (7.79%).
CONCLUSION
The capital importation for Q3 represented a 51.90% decline from Q2 2024 ($2.6 billion). We expect that with ongoing economic activities in the current quarter (Q4), there will be a significant increase in capital importation for Q4 2024, in comparison to the quarter under review, especially in the oil and gas sector, which accounted for NIL capital importation for Q3. Notable capital importation in the current quarter includes the $1.2billion acquisition of Equinor Nigerian subsidiary, by Mauritius-based energy firm, Chappal Energies; the completion of acquisition of Mobil Producing Nigeria Unlimited from ExxonMobil Corporation; CBN Treasury Bill; and the acquisition of Lafarge Africa Plc from Holcim Plc.
[1] Except where stated otherwise, all figures in this review were sourced from the NBS official website: nigerianstat.gov.ng
[2] NGX Corporate Disclosure by Guiness Nigeria
[3] Deals and Advisory Report Prudential Plc increases stake in Prudential Zenith Insurance Ltd to 100%
6 Zenith Bank Corporate Disclosure
7Access Bank Corporate Disclosure
9CBN Q3 Treasury Bills Results
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