Why foreign investors are interested in Nigeria – Cardoso

Bisola David
Bisola David
Investors lose N67bn as market dips

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has stated that Foreign Portfolio Investors want the government to implement policy reforms that will allow them to bring in their capital.

Cardoso stated this on Monday in an interview with Arise TV, when he answered questions regarding the recent volatility in the foreign exchange market.

The latest report on capital importation from the National Bureau of Statistics showed that in Q3 2023, capital importation into Nigeria stood at $654.65m, lower than $1.16bn recorded in Q3 2022, indicating a decline of 43.55 per cent. In comparison to the preceding quarter, capital importation fell by 36.45 per cent from $1.030bn in Q2 2023.

However, other assets came in first, making about 77.56 per cent, the total capital importation in Q3 2023, portfolio investment was 13.31 per cent ($87.11m) and foreign direct investment brought in 9.13 per cent ($59.77m).

In response to a question regarding FPIs, Cardoso stated, “Some people think that because foreign portfolio investors are wealthy, they must be doing well. That isn’t what I think the case is. I assume that you will have a diverse mix of investors in any portfolio you have, be it corporate or sovereign.

“Many foreign portfolio investors are interested in returning to the Nigerian market in the current environment, and if there is any group that has shown interest, it is because they have not rushed to get in but rather have shown a methodical interest in learning about the reforms being implemented and where they are taking the country to a direction they believe is the right one, it is the foreign portfolio investors.”

The head of Nigeria’s top bank continued, saying that the rating agencies’ findings validated the FPIs’ political views.

“They arrive, you fear they won’t return, but then they return a second and third time, and then they observe some rating organizations releasing their own assessments of how they perceive the nation’s economy developing. It supports the way they think. We carry out more reforms because it keeps encouraging them. That’s how I envision today’s investors playing.

“Gone are the days when you could isolate yourself. The important thing is to include it into the variety of incoming flows,” he stated.

He continued by saying that the government’s recent decision to pay the Nigerian National Petroleum Corporation Limited as well as other ministries, departments, and government organizations sends a message to international investors.

“The recent decision by NNPCL and other MDAs to transfer their financing directly to the central bank,” he claimed, “also sends a power message. It gives investors more hope that Nigeria is finally moving in the direction that many would like to see it go.”


Share this Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *