By Alex Omenye
The Central Bank of Nigeria Governor, Yemi Cardoso, is scheduled to participate in a significant meeting with foreign portfolio investors on Wednesday, February 28, 2024.
Facilitated by the Nigerian Exchange Group in collaboration with the CBN and supported by prominent financial institutions such as Standard Bank, Citi Bank, J.P. Morgan, and Standard Chartered, this strategic dialogue signifies a joint endeavor to fortify the connections between Nigeria’s financial sector and the global investment community.
The meeting, as revealed through a widely circulated flier before the deactivation of the Zoom link, is poised to serve as a pivotal platform for the CBN to engage directly with international investors.
This engagement comes at a crucial time as the CBN initiates vital reforms to stabilize the naira and fortify the Nigerian economy.
Market analysis from the Nigerian Exchange Limited (NGX) indicates a discernible downturn in foreign investor participation in the Nigerian stock market. In January 2024, foreign investors’ purchases of Nigerian stocks witnessed a decline of approximately 9.7%, with investments decreasing from N17.48 billion in December 2023 to N15.48 billion. This shift occurred despite earlier reforms that had sparked a substantial surge in market activity.
The data also highlights a surge in the volume of stocks sold by foreign investors, reaching N37.33 billion in January 2024, a 22.8% increase from the N30.39 billion recorded in the previous month.
This trend suggests a growing caution among foreign investors, possibly attributed to a reassessment of market conditions or global economic uncertainties.
This waning foreign investment interest coincides with concerted efforts by the CBN and NGX to spearhead initiatives aimed at strengthening foreign direct investment inflows into Nigeria. Such investments play a critical role in the nation’s economic stability and growth by attracting international capital to fuel economic development.
The decline in foreign stock purchases, coupled with the rise in sales, reflects a cautious stance from international investors despite the evident potential of the Nigerian market.
As the CBN and NGX lead this engagement with foreign investors, the overarching expectation is for a positive impact on foreign direct investment inflows, a crucial factor for Nigeria’s long-term economic success and stability.
