Are FPIs back in Nigeria?

In a recent interview on CNBC Africa, the discussion centered around the investment landscape in Nigeria and the potential return of foreign portfolio investors (FPIs) to the country following ongoing reforms. The Governor of the Central Bank of Nigeria, Olayemi Cardoso, highlighted the increasing appetite for Nigerian investments, with the foreign exchange market seeing a significant liquidity volume surpassing one billion dollars. Victor Aluyi, the Head of Investment at Sankore Global Investment, shed light on the current situation, emphasizing the importance of attracting FPIs back to Nigeria. Aluyi acknowledged the strides taken by the government to liberalize the currency and boost market confidence through various circulars. While there is a positive trend in interest from foreign investors, he emphasized the need for price stability and progress in that regard to ensure sustained investment inflows. One of the key factors driving investment decisions is the upcoming Monetary Policy Committee meeting and the expected hawkish stance on interest rates. Aluyi discussed the importance of using monetary policy tools to tackle inflation and create an environment conducive to investments. The focus on price stability remains crucial for sustaining the interest of investors. Further, the conversation delved into the implications of Central Bank's moves on different sectors and how they influence investor decisions. Aluyi highlighted the significance of addressing price stability and foreign exchange challenges to encourage risk-taking within the economy. While past efforts have had mixed results, the current initiatives aim to provide greater incentives for investors. Comparing Nigeria's attractiveness to other West African markets, such as Cote d'Ivoire and Benin, Aluyi pointed out the recent successful Euro bond issuances by these countries. While Nigeria's fiscal situation may not be as robust, the improved investment landscape offers an opportunity to tap into international capital markets. The discussion touched upon the potential for Nigeria to follow suit and access foreign private investment by aligning with global trends. As the conversation concluded, the focus shifted to external financing mechanisms, including IMF programs and Moody's assessment, providing a cushion for Nigeria's economic stability. While challenges exist, the overall sentiment suggests a positive outlook for Nigeria's investment prospects in the near future. In conclusion, the recent developments in Nigeria's investment landscape showcase a growing interest from foreign investors, signaling potential opportunities for the country amid ongoing reforms. The efforts to maintain price stability, enhance liquidity, and align with global investment trends position Nigeria as an attractive destination for investment in the region.