Despite COVID-19, Nigeria Capital Importation Grew in Q3 – Norrenberger MD
AREWA AGENDA- The managing director of Norrenberger financial group, Tony Edeh said despite the impact of COVID-19, Nigeria recorded growth in third quarter of 2020.
Speaking to LEADERSHIP on the impact of the ravaging COVID-19 pandemic in foreign direct investments and the economy of Nigeria, Edeh said “Nigeria attracted the third-largest foreign direct investment (FDI) inflows of any African country in 2019.
“Also, in 2020, the most visible and immediate spillover of COVID-19 was the drop in the price of crude oil, which dropped from nearly US$60 per barrel to as low as US$30 per barrel in March. During the pandemic, people were no longer travelling and this led to a sustained fall in the demand for aviation fuel and automobile fuel which affected Nigeria’s net oil revenue, and eventually affected Nigeria’s foreign reserve,” Edeh stated.
He further explained that “as the oil sector accounts for the bulk of Nigerian government revenue, this collapse in prices had profound implications for the economy.
“As at the end of Q3 2020, The total value of capital importation into Nigeria stood at $1,461,490,000. This represents an increase of 12.86 per cent compared to Q2 2020 and -74.03 per cent decrease compared to the third quarter of 2019, with total capital importation of $5.62 billion. This amounts to a loss of $4,158,510,000 compared to 2019
“The largest amount of capital importation by type was received through Other investments, which accounted for 43.75 per cent ($639.44m) of total capital importation, followed by Foreign Direct Investment (FDI), which accounted for 28.38 per cent ($414.79m) of total capital imported and Portfolio Investment which accounted for 27.87 per cent ($407.25m) of total capital imported in Q3 2020.”
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Speaking on the new financial course for Nigeria and the role of Norrenberger, Edeh said “at Norrenberger, we are guided by our mission to positively unlock the opportunities in the society for our clients and stakeholders. We are passionate about the strength of our brand and our vision to simplify wealth creation for our clients and our people, through the benefits we bring and the results we achieve. To do this, we work by a set of values that enable us to live out our purpose of empowering the people and organization we work with.
“We unlock opportunities in our society by providing cutting edge investment options and access to alternative financing which in turn allows people to bring their innovative ideas to life and expand their existing businesses. Our focus is to continue to create financial asset classes targeting the need of every single household in Nigeria. By 2025, we hope to have delivered at least one financial solution to every household.”
He also said the COVID-19 pandemic has cost Nigeria’s economy about over a trillion naira in 2020.
According to him, “due to COVID-19, the Nigerian economy slipped into a recession in the third quarter of 2020 following a GDP contraction of -3.62 per cent.
This is the second recession since 2016.
“Recessions in Nigeria have mostly been caused by a fall in the price of crude oil and the absence of large fiscal/monetary buffers in a structurally weak economy.
“The impact of the 2020 recession on individuals and businesses has been more severe due to the nature of the pandemic. With COVID-19, businesses were forced to shut due to lockdown and social distancing.
“This had a toll on individuals’ income, corporate and government finances. Real losses in real output and other disruptions was estimated at N5.8 trillion in 2020.
“In nominal terms, this loss is estimated at N11.6 trillion.
“In addition to direct output loss, there have also been significant job losses, income losses, erosion of monetary value, among others. COVID-19 and other disruptions have reversed the gains achieved prior to 2020.”
By Ejike Ejike, Abuja
Arewa Agenda is a publication of young writers and journalists from Northern Nigeria geared towards peaceful coexistence and national development through positive narratives.
