A total of N168.77bn foreign capital escaped Nigeria within seven months, the foreign portfolio investment (FPI) record of the country reveals.
A document obtained by Daily Trust from the Nigeria Stock Exchange (NSE) shows that from January to July, this year, an approximated 54 per cent of FPI left the country.
On a monthly basis, the NSE polls trading figures from major custodians and market operators on their FPI outflow which included sales transactions or liquidation of portfolio investments through the stock market, likewise FPI inflow, which included purchase of same.
On a year-to-date basis, while N168.77bn was repatriated, N144.72bn foreign fund was invested on Nigerian stocks, though a 54.99 per cent decline was indicated in terms of total foreign transactions on stocks from N696.46bn in comparative period in 2015 to 313.49bn this year.
Experts say that the distressed Nigerian economy stood a good chance to lose more foreign capital, pointing out that the government was yet to convince investing foreign community of its short term, medium term and long term policy direction.
According to Malam Garba Kurfi, a stockbroker and financial analyst, foreign investors move their money to any country of the world “where they are confident of meeting clear policy direction.”
Kurfi, the Managing Director, APT Securities and Funds Limited, said that Nigeria’s foreign exchange policy was capable of pushing away investments owing to its persistent depreciation of the local currency.
“Since introduction of the flexible exchange rate till date, the naira has not appreciated more than 10 to 15 per cent, while the dollar has moved from N300 to almost N500,” he said.
“If this is what obtains in the black market, then, the black market is telling the reality on the ground.”
Another investment expert who did not want his name mentioned said that the daily depreciation of the naira was among factors causing value of foreign investments in Nigeria to decline.
“A dollar invested in the country at a time when the exchange rate was N300 would have lost almost 55 per cent of its value now that the naira trades for around N465 to a dollar,” he pointed out.
“How can investors recover from such acute loss when repatriating their foreign currencies?”