Nigeria Foreign Portfolio Investments advances to $16bn

The value of foreign investors’ holdings of Nigeria’s local debt instruments rose significantly to $16 billion as of the end of March, signposting the renewed investor confidence in the country.

The International Monetary Fund’s Mission Chief to Nigeria, Mr. Amine Mati, who disclosed this while making a presentation at the Moody’s Investors Service Fourth Annual West Africa Summit titled: ‘Nigeria’s Recovery: Slow and Sturdy,’ that took place in Lagos this week, put the value of foreign investors’ holdings in domestic debt instruments in Nigeria previously at about $4 billion.

In addition, he said Nigeria’s equities market has also seen increased interest by foreign investors.
“Last year, foreign holdings of local debt was about $4 billion, as at the end of March this year, foreign holdings of local debt was $16 billion, which shows a lot of interest in the country,” he explained.

Mati added: “The good news is that Nigeria is out of recession. Another good news is the stability in the foreign exchange market. February 2017 was the peak when we had the exchange rate at N520 to a dollar, the official rate at N305 to a dollar and we had different windows.”

He commended the Central Bank of Nigeria (CBN) for introducing the Investors’ and Exporters’ (I & E) foreign exchange window in April last year, which he said also contributed to the increased investor confidence in the country and the accretion recorded by the country’s forex reserves currently at a four-year high of about $48 billion.

Nevertheless, he reiterated the position of the IMF that Nigeria was exposed to oil price volatility as well as its high debt level.
Furthermore, Mati expressed concern about the slim Gross Domestic Product (GDP) growth of 0.8 per cent recorded by the country in 2017. He pointed out that save for the oil and gas as well as the agric sectors, other sectors had not picked.

He stressed the need to enhance non-oil revenue mobilisation in the country, that in Nigeria, Debt-to-GDP ratio is not an issue, but the high level of debt service.

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