Foreign Portfolio Investors (FPIs) are eyeing Nigeria due to an interest in the country’s policy reforms, according to Olayemi Cardoso, the Governor of the Central Bank of Nigeria.
In an exclusive interview on Arise TV, Cardoso emphasized the need for policy adjustments to accommodate the influx of funds from these investors.
Addressing concerns about the recent currency market volatility, Cardoso acknowledged the decline in capital importation in Q3 2023 but highlighted the growing interest of FPIs.
He stated, “Foreign portfolio investors are methodically taking an interest in understanding the reforms taking place in Nigeria. They believe the country is heading in the right direction, and it’s not just about hot money.”
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Contrary to the notion of FPIs being solely interested in short-term gains, Cardoso argued that they are approaching Nigeria cautiously, evaluating the ongoing reforms.
The latest statistics from the National Bureau of Statistics revealed a decline in capital importation, with portfolio investment constituting 13.31% ($87.11m) in Q3 2023.
Cardoso emphasized the significance of foreign investors’ interest, noting that they return multiple times to validate their assessments.
The rating agencies’ reports on Nigeria’s economic progress align with FPIs’ sentiments, further reinforcing their confidence in the market.
The governor also highlighted the impact of recent government moves, such as directing the Nigerian National Petroleum Corporation Limited and other agencies to route their funding through the central bank. He stated, “This sends a powerful message and boosts confidence that Nigeria is moving in a direction favored by many investors.”
In a globalized economic landscape, Cardoso stressed the importance of embracing diverse inflows, emphasizing that shutting oneself out is no longer viable. As Nigeria continues its reforms, FPIs are expected to play a crucial role in the country’s economic growth, bringing in both capital and expertise.