Business

Foreign Portfolio Investments Drop 49% In 2 Months Of 2023

Published

3 years ago

April 3, 2023

There are indications that foreign investors are not yet comfortable with Nigeria’s external sector position as well as the political environment as Foreign Portfolio Investments, FPIs, declined by a significant 48.7 percent in the first two months of this year when compared to the corresponding period of 2022.

The foreign investors had renewed their divestment measures some months before the general elections, a development which signaled lack of confidence.

Vanguard findings from the latest data released by the Nigerian Exchange Limited, NGX, revealed that the value of FP1s for the two months of the year stood at N44.52 billion as against N86.74 billion in the corresponding period of 2022.

In January 2023, the FPIs declined by 39.7 % to N24.9 billion as against N41.31 billion in the corresponding period of 2022. In February 2023 it dropped by a whopping 56.8 % to N19.62 billion as against N45.43 billion in the corresponding period of 2022.

Economy experts and analysts have attributed the decline on FPIs to foreign exchange volatility, inconsistent government policies, and market regulations among others.

In the absence of the foreign investors, the domestic counterparts have filled the gap and in February 2022 they accounted for 88.41 percent of the total value of transactions recorded in the bourse.

The total value of transactions recorded by the Exchange for the two months period stood at N384.01 billion.

Analysis from the latest figure released by the Exchange showed that foreign investors accounted for only 11.59 percent of the total value of transactions.

A review of the transactions showed that in January 2023 domestic investors outperformed the foreign investors accounting for 87.24 percent or N170.20 billion of the total transaction valued at N195.10 billion.

In the month of February 2023 the domestic investors also outperformed foreign investors accounting for 89.61 percent of the total value of transactions worth N188.91 billion.

Findings revealed that institutional investors dominated the domestic investments in the two months period representing 79.2 percent of the domestic investments worth N339.49 billion.

Experts’ comment

Many financial analysts believe FPIs commitment in Nigeria is on downward trend because of the exchange rate volatility and the political situation in the country.

Commenting, analyst and Executive Vice Chairman, David Adonri, said: “There is a foreign exchange rate risk attendant to foreign portfolio investment. Persistent depreciation of the Naira in recent past is capable of heightening exchange rate risk leading to loss on investments.

“Secondly, foreign portfolio investors’ confidence was eroded by their inability to remit proceeds of their investments.

“Finally, FPIs are sensitive to socio-political events. Few of the investors who have taken the risk arising for the political tension are investing in Fixed Income, FI.

“The political tension in Nigeria even with the conclusion of the general election is still not over and it continued to threaten the safety of their investments, hence their low confidence in the economy.

“If the new administration is able to make the market attractive we would begin to see foreign investors back to the market.”

Tajudeen Olayinka, CEO of Wyoming Capital and Partners, said: “The Foreign Portfolio Investment in equity is declining because of the exchange rate management.

“A situation of multiple exchange rate regime cannot give room for proper allocation of resources in the economy. This is one of the macroeconomic factors that have made it difficult for Nigeria’s economy to adjust to full employment output and external balance over the years.

“This situation may improve in the coming years with an administration that has preference for private sector dominance.”

Also commenting, Prof. Uche Uwaleke, Economy expert and President Association of Capital Market Academic of Nigeria, said: “Until we begin to see changes in the monetary policies such as exchange rate, improved market regulations the FPIs will continue to fall.”

Reacting to the decline in FPI, analyst/ Head of Research and Investment, Fidelity Securities Limited, Victor Chiazor, said: “We have constantly seen reduction in foreign portfolio investments year-on-year, YoY, and it is likely that the situation may change once the new administration get things right in the Nigerian economic management system.”

He added, “Issues around exchange rate, capital importation and corporate governance amongst others continue to discourage foreign inflow.

“Until foreign investors see concrete policies and effort to correct some of these anomalies, domestic investors will continue to carry the market.

“Moreso, over the years we have seen investors confidence reduce which has led to the drop in Foreign Portfolio Investment.

“Issues around unavailability of foreign exchange, corporate governance, weak market regulation and oversight function and inconsistent government policies have weakened foreign participation in the equities market and until all of these issues are addressed the market will continue to be dominated by domestic participants.”
VANGUARD

Related Topics:Business Foreign investment

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NNPCL Raises Fuel Price

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2 weeks ago

October 13, 2025

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The Nigerian National Petroleum Company Limited (NNPCL) has increased the pump price of petrol from ₦865 to ₦992 per litre, marking a fresh hike that has sparked widespread concern among motorists and consumers .

As of the time of filing this report, the company has not released any official statement explaining the reason for the sudden adjustment.

During visits to several NNPC retail outlets, The Nation observed fuel attendants recalibrating their pumps to reflect the new price.

At NNPC filling station on Ogunusi road, Ojodu Berger, petrol attendants at the station said they were instructed to change the price to reflect the new rate N992 per litre.

However, checks at Ibafo along the Lagos /Ibadan expressway showed that NNPC outlets still displayed the old price of N875 per litre, although they were not selling to commuters.

Most of the NNPC stations were not dispensing fuel.

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CBN Directs Banks To Refund Failed ATM Transactions Within 48hrs

Published

2 weeks ago

October 11, 2025

Editor

The Central Bank of Nigeria has directed Deposit Money Banks and other financial institutions to refund customers for failed Automated Teller Machine transactions within 48 hours, in a sweeping reform aimed at protecting consumers and restoring confidence in the banking system.

The directive is contained in a draft guideline released by the apex bank on Saturday, titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria.”

The document, signed by Musa I. Jimoh, Director of Payments System Policy Department, was circulated to banks, payment service providers, card schemes, and independent ATM deployers, with a call for stakeholder feedback by October 31, 2025.

Under the draft, failed “on-us” transactions, where customers use their own bank’s ATM, must be reversed instantly. If technical glitches prevent immediate reversal, the bank is required to manually refund the customer within 24 hours.

For “not-on-us” transactions, involving other banks’ ATMs, refunds must be processed within 48 hours.

“Customers must not be made to suffer for failed transactions caused by system errors or network failures,” the circular stressed.

In a significant shift, the CBN mandated banks and ATM acquirers to deploy technology that automatically reverses failed or partial transactions, removing the need for customers to lodge complaints.

Institutions holding customer funds due to failed disbursements must reconcile and return balances immediately.

According to the apex bank, these measures respond to widespread frustration over delayed refunds and poor customer service and form part of a broader effort to enhance consumer protection, improve reliability, and modernise Nigeria’s payment infrastructure in line with global standards.

The guidelines will also overhaul ATM operations nationwide. Banks and card issuers are now required to deploy at least one ATM for every 5,000 active cards, with phased targets of 30% compliance in 2026, 60% in 2027, and full compliance by 2028. Any future deployment, relocation, or decommissioning of ATMs must receive prior approval from the CBN.

To ensure safety, ATMs must be fitted with anti-skimming devices, CCTV cameras, and placed in enclosed or well-lit areas.

Machines are expected to comply with Payment Card Industry Data Security Standards, maintain audit logs, and display functional helpdesk contacts. At least 2% of all ATMs must feature tactile symbols for visually impaired customers.

ATMs are also required to dispense cash before returning cards, allow free PIN changes, issue receipts for all transactions except balance inquiries, display clear transaction fees, dispense only clean banknotes, and provide backup power to reduce downtime.

Downtime must not exceed 72 consecutive hours, after which operators must inform the public of the cause and expected restoration time.

The CBN will enforce compliance through regular audits, on-site inspections, and monthly reports from ATM operators detailing deployments and locations. Defaulting institutions risk sanctions, though fines were not specified.

The apex bank explained that the overhaul was necessary due to rising complaints about failed transactions, cyber fraud, and declining service quality, noting that “the goal is to build a payments system that works seamlessly for everyone, urban and rural users alike.”

Nigeria’s electronic payments landscape has grown rapidly in recent years, with 200 million cardholders and rising reliance on digital banking, but network failures, poor infrastructure, and delayed reversals have continued to undermine confidence.

The fresh guidelines, coming eight months after a revision of ATM fees, are expected to streamline service delivery, enhance transaction security, and hold banks accountable. Stakeholders are invited to submit feedback ahead of the final policy adoption, which could take effect before the end of the year.

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Nigerian Stock Market Hits 10th Consecutive Uptrend As investors Gain N308bn

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October 10, 2025

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The Nigerian Stock Market recorded its 10th consecutive uptrend as investors raked in N308 billion gain on Thursday.

This comes as the Nigerian Exchange Limited, NGX, market capitalisation, which opened at N92.490 trillion, appreciated by 0.33 per cent to close at N92.798 trillion on Thursday.

Also, the All-Share Index added 0.33 per cent, or 485.25 points, to close at 146,204.34, compared with 145,719.09 recorded on Wednesday.

Increased trading in Eunisell Interlinked, Caverton Offshore Support Group, Sunu Assurances, Industrial and Medical Gases, Mecure, and 27 other advancing stocks boosted market performance on Thursday.

To this end, the market breadth also closed positive with 32 gainers and 21 losers.

Further analysis showed that Eunisell Interlinked and Caverton Offshore Support Group led the gainers’ chart by 10 per cent each, closing at N44 and N6.93 per share, respectively, while FTN Cocoa Processors led the losers’ table by 6.67 per cent, closing at N5.60 per share.

Market activity showed a decline in the number of deals and volume traded but an improvement in trade value.

Accordingly, a total of 346.99 million shares worth N27.43 billion were traded in 24,691 deals, compared with 525.72 million shares worth N13.61 billion exchanged in 25,597 deals on Wednesday.

Fidelity Bank topped the activity chart with 42.01 million shares valued at N861.54 million.

According to DAILY POST, NGX has continued its bullish run from last month’s end to date.