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Nigeria capital imports sink 79% in second quarter as economy shrinks

Published 29/08/2020, 17:07
© Reuters.

ABUJA, Aug 29 (Reuters) - Nigeria's capital imports plunged
78.6% in the second quarter year-on-year to $1.295 billion, the
statistics office said, as lower oil prices push Africa's
largest economy towards recession.
Nigeria, Africa's top oil exporter, has suffered its worst
crisis in decades as low oil prices triggered by the coronavirus
pandemic caused the economy to shrink in the second quarter,
slashing government revenues and weakening the naira currency.
The government expects further GDP contractions in the third
and fourth quarters. Nigeria has seen an exodus of foreign money in its equity
and debt market, though foreign investors have been caught up by
a shortage of dollars on the currency market as global oil
prices collapsed.
"The largest amount of capital importation by type was
received through other investment... followed by portfolio
investment... and foreign direct investment in Q2," the National
Bureau of Statistics said in a report.
Nigeria's capital imports fell from a peak of $21.32 billion
seven years ago to $5.12 billion in 2016 as investment dried up
in the wake of a recession, and have barely recovered since
then.
A foreign exchange shortage has seen the naira drop to
record lows on the black market in recent months after two
devaluations and central bank moves to unify the country's
multiple exchange rates.

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