Global investor confidence is rising in Nigeria as Central Bank of Nigeria (CBN) reported that aggregate foreign capital inflows jumped up by as much as 87.39 per cent to peak at $6.07 billion in the third quarter of last year.
Of the total capital inflows, Foreign Direct Investment (FDI) accounted for 23.79 per cent, while Portfolio Investment (PI) stood at 76.21 per cent.
Further analysis showed that both FDI and PI inflows rose over their levels in second quarter, 2012 by 81 and 75.9 per cent respectively.
According to CBN’s External Sector Development Report, the continued dominance of portfolio investment in aggregate foreign capital inflows suggests the need to put in place measures against capital reversal.
On external trade, Nigeria’s trade balance improved significantly from $8.62 billion in second quarter of last year and $1.60 billion in third quarter, 2011 respectively to $12.37 billion in third quarter of 2012.
It said aggregate exports rose by 8.2 per cent from $22.53 billion in third quarter 2011 to $24.37 billion in third quarter, 2012 while aggregate imports (CIF) declined by 42.7 per cent to $11.99 billion in the review period.
The report said the official foreign reserves as at end of September, 2012 stood at $40.46 billion as against $35.41 billion and US$31.74 billion in second quarter, 2012 and third quarter, 2011 respectively.
It added that the external reserves could finance 17.8 months of foreign exchange disbursements and 11.4 months of imports in third quarter, 2012 compared with 11.4 months of foreign exchange disbursements and 7.33 months of imports in second quarter, 2012.
The external reserves recorded an accretion of $5.23 billion in third quarter over its level in second quarter, 2012 largely due to positive terms of trade shock.
On sectoral utilization of foreign exchange, the report revealed that $6.47 billion or 66.72 per cent was spent on the importation of various items into the country in the third quarter, 2012.
The importation of oil, industrial, food and manufactured products accounted for 29.0, 27.0, 19.0 and 16.0 per cent of the total amount utilized for visible imports respectively.