The Central Bank of Nigeria (CBN) on Thursday declared that the financial and manufacturing sectors caused the jump in Nigeria capital outflow.
This was disclosed by the Apex bank in its recently released monthly economic report for October 2021.
The apex bank stated that capital outflow increased by 7.6%, driven mainly by financing and production/manufacturing sectors.
However, the CBN still faces challenges on the capital inflow front as the attractiveness of securities in the international financial market, particularly in the United States, has harmed foreign capital inflow to the Nigerian economy.
The CBN identified that capital outflow increased and surpassed the previous month. The report said, “Capital outflow increased by 7.6 per cent, driven mainly by financing and production/manufacturing sectors. Total capital outflow amounted to US$0.88 billion in October 2021, relative to US$0.82 billion in September 2021.
CBN again said Loan and Capital were at the forefront of Nigeria’s capital outflow.
“A disaggregation of capital outflows by type of investment reveals that outflows of loans was US$0.34 billion, or 38.3 per cent of the total, dividends US$0.03 billion or 2.9 per cent, capital was US$0.50 billion or 56.5 per cent, while other outflows at US$0.02 billion accounted for 2.3 per cent of the total.”
The CBN added that “Disaggregation of capital outflow by sectors reveals that outflow through the financing sector at US$0.37 billion was 42.3 per cent, production/manufacturing, US$0.19 billion (22.0 per cent), banking, US$0.12 billion (13.7 per cent), and telecommunications, US$0.10 billion (11.1 per cent). Other sectors accounted for the balance.”
CBN stated that its intervention in the Nigerian agricultural sector has led to the massive reduction in imported rice from Thailand from 2014 when Thailand exported 1.3 million metric tons of rice to Nigeria to just 58,000 metric tons at the end of 2021.