The National Bureau of Statistics (NBS) has released data showing that Foreign Direct Investment (FDI) investment in Nigeria’s equity market fell to $377.37 million in 2023, almost a 10-year low, due to a lack of foreign exchange, among other reasons.
The NBS reported $377.38 million, an 18.48% decrease from the $462.91 million reported in 2022, in its most recent report on Nigeria’s capital importation for 2023.
Foreign investors left the Nigerian market in June 2023 as a result of the unpredictability surrounding the general elections in 2023, but trust was regained when President Bola Tinubu announced the abolition of fuel subsidies and the unification of foreign exchange.
The bureau reported that FDI in the equities market reached a peak of $1.44 billion in 2015, with a total of $1.45 billion in FDI reported.
The bureau’s report revealed that the overall amount of foreign direct investment in the capital market in 2023 was $377.37 million, a 19.4% decrease from $468.08 million in 2022.
Conversely, portfolio equity investments increased dramatically to $250.03 million in 2023, up 341.98 percent from $56.57 million in 2022.
The amount of money invested in stocks, bonds, and money market instruments decreased by 53% from $2.44 billion in 2022 to $1.15 billion in 2023, as reported by the bureau.
Additional research showed that the $1.15 billion stock and other portfolio investment is the lowest it has been in more than ten years.In 2023, the London Stock Exchange Group (LSEG) subsidiary FTSE Russell downgraded the Nigerian market due to foreign exchange (FX) issues.
This represents a fresh source of negative sentiment that could lead to a sell-off of stocks at the Exchange.