Foreign transactions on capital market dip by 75% in eight years | The Guardian Nigeria News - Nigeria and World News

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Foreign appetite for the Nigerian capital market has dropped by 75% in 8 years due to market uncertainty, FX illiquidity and political risk. Domestic transactions have increased.

• Insist market must determine rate

However, total domestic transactions soared within the same period, increasing from N90 billion in 2015 to N170 billion in 2023. Disturbed by the sustained capital flight, operators have urged the Federal Government to institute a framework for a new foreign exchange market, allowing market mechanisms to determine the exchange rate to a predictable exchange rate.

He pointed out that fears around Nigeria’s worsening insecurity, political risk and forex issues have become visible in the manner at which foreign direct investment declined in the past few years. “It greatly eroded investors’ confidence in the capital market. And when added to his indolence at combating the economic challenges he inherited from the previous administration, the attendant deterioration of the economy caused the equities market investors to lose a huge amount of money.”

Olayinka pointed out that Nigeria is in dire need of foreign investment to enable the country to navigate through an adjustment programme that must necessarily come into place in the near future.

 

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