Standard Chartered, Stanbic IBTC, Citibank, Rand Merchant top capital importation

National Bureau of Statistics’ Data has shown that three bank with foreign interest facilitated bulk of the foreign money that came into the country. The banks are Standard Chartered Bank, Stanbic IBTC, Citibank and Rand Merchant Bank which NBS said collectively received 73% of capital inflow in 2020. The Bureau in its fourth quarter 2020 report said “the total value of capital importation into Nigeria stood at $1,069.68 million in the fourth quarter of 2020. This represents a decrease of -26.81% compared to Q3 2020 and -71.87% decrease compared to the fourth quarter of 2019. Similarly, the total value of capital importation in 2020 stood at $9,680.49 million, compared to $23,990.05m in 2019, representing a decline of -59.65% between the two periods. 

The largest amount of capital importation by type was received through Other investment, which accounted for 73.22% ($783.26m) of total capital importation, followed by Foreign Direct Investment (FDI), which accounted for 23.49% ($251.27m) of total capital imported and Portfolio Investment which accounted for 3.29% ($35.15m) of total capital imported in Q4 2020. By sector, Capital importation by Shares dominated in Q4 2020 reaching $287.04m of the total capital importation in Q4 2020. The United Kingdom emerged as the top source of capital investment in Nigeria in Q4 2020 with $236.88m. This accounted for 22.14% of the total capital inflow in Q4 2020. By Destination of Investment, Lagos state emerged as the top destination of capital investment in Nigeria in Q4 2020 with $829.64m. This accounted for 77.56% of the total capital inflow in Q4 2020.

By Bank, Citibank Nigeria Limited emerged at the top of capital investment in Nigeria in Q4 2020 with $216.17m. This accounted for 20.21% of the total capital inflow in Q4 2020.  Standard Chartered Bank (SCB) tops the list with $2.54 billion, followed by Stanbic IBTC $2.17 billion, Citibank $1.51 billion and Rand Merchant Bank $822 million. In 2019 the same 4 foreign-owned banks also dominated and received as much as $16.66 billion out of the $23.98billion capital inflows for the year, representing 69%. In 2020, inflows reduced by 60% from $23.98 billion recorded in 2019 to $9.68 billion in 2020

In 2019, Stanbic IBTC topped the list with inflows of $8.63billion, followed by Rand Merchant Bank $2.93billion, SCB $2.82billion, Citibank $2.28 billion. The top 5 banks in 2020, majorly 4 foreign-owned banks and First Bank, received the sum of $7.98 billion, representing 82%, with the other 22 operating local banks receiving only $1.70 billion (18%) Also in 2019, the top 5 banks made up of the 4 foreign-owned banks and Access Bank received the sum of $18.46billion, representing 77%, with the other 22 operating local banks receiving only $5.52 billion (23%). Huge amounts of the Nigerian capital importation have been consistently received through the 4 foreign-owned banks with not much received by the entire 23 other locally owned banks. 

The consistent disposition of foreign investors routing their funds through the foreign-owned banks may not be unrelated to the confidence and trust they have in those banks. It may be necessary for the regulators especially the Central Bank of Nigeria (CBN) to spearhead aggressive efforts with other relevant stakeholders towards creating better images for the local banks in the minds of foreign nations and investors.