Foreign investors are shying away from investing in Nigeria despite the post-pandemic rebound as the risk rate return may not be attractive enough, experts indicated Tuesday.
Nigeria should attract foreign investors because of its stature as Africa’s biggest economy however it has been battling with a constant decline in its foreign exchange (FX) and transfers from abroad (foreign aid).
“The rebound after the pandemic certainly did not instill confidence in foreigners, the risk rate return may not be attractive enough at this moment, the supply of foreign exchange to the Import and Export windows is really not enough in the foreign exchange market,” said Ari Aisen, IMF’s Nigeria Resident Representative at Stanbic IBTC Nigeria Investors’ Webinar Series.
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Aisen stated that there are less portfolio flows coming to Nigeria.
“The current account is narrowing, foreign exchange supply has been limited. From the import and export window, it used to be very busy and it has not returned to pre-pandemic levels,” Aisen said.
According to the Domestic & Foreign Portfolio Investment Report of Nigerian Exchange Limited, the total foreign transactions decreased by 7.17 percent from N45.43billion (about $109.30million) to N42.17billion (about $101.36million) between February 2022 and March 2022.
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