…As investment inflow into banking sector, shares, financing, production and telecoms grew in 2020
Agricultural sector being one of the critical sectors of Nigeria’s economy attracted a total of $1,408.15 million as investment inflow in the last seven years as deduced. This is based on the National Bureau of Statistics report on Nigeria Capital importation sighted by MSMEsToday.
This is by far less than the actual investment inflow of $3,751.07 million to banking sector, $1,894.64 million into financing, $1,852.20 million investment inflow to shares, $913.88 million into production and 417.48 million into the telecoms sector. This implies that agricultural sector occupied the sixth place with $324.58 million in terms of the country’s sectoral capital importation in 2020.
Provisional data showed an improvement in capital inflow into the agricultural sector in the last seven years, especially in 2020 and this is attributed to increased demand for loans to ease the growing financial difficulties the COVID-19 pandemic have caused institutional sectors in the economy in which agricultural sector was included.
Between the period of 2014 and 2020, investment inflow into the agricultural sector grew by more than a thousand times (1,234%). In 2014, capital inflow of $24.32 million went into agricultural sector and this increased by $300.26 million to $324.58 million in 2020. However, on the year-to-year basis the situation was totally different with inflow to the sector declining by 33.75% or $165.33 million to $324.58 million in 2020 from $489.91 million in 2019.
Considering the years under review, the sector received its peak capital importation of $489.48 million in 2019 compared to other years which experts projected to grow further but the expectation was cut short due to the of effect COVID-19 pandemic which continued to weigh on different economies. On the other hand, the sector received the lowest inflow of $22.47 million in 2016.
The sector enjoyed steady growth in capital importation between the periods of 2016 to 2019. In 2016, the sector recorded investment inflow to tune of $22.47 million, which increased by more than 600% to $159.06 million in 2017. It increased further by 81.99% to $289.48 million in 2018 from $159.06 million in 2017 and it increased from $289.48million in 2018 to $489.91 million in 2019, representing a growth of about 69.24%.
In 2020, the total value of Nigeria’s capital importation stood at $9,680.49 million compared to $ $23,990.05 million in 2019, representing a decline of 59.65% between the two periods. Agricultural sector amongst other sectors accounted for 3.35% or $324.58 million of the total value of capital importation of $9,680. 49 million during the period.
Basically, Nigeria’s capital importation received through Foreign Direct Investment, Portfolio Investment and other investments, which include loans according to a report released by NBS for year 2020 shows that the largest amount of capital importation by type was received through other investments, 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 of 2020.