FOREIGN capital inflows into Nigeria surged to $6bn in the first half of 2024, more than doubling from the $2.16bn recorded during the same period in 2023, according to new data released by the National Bureau of Statistics (NBS) on Tuesday.
This significant increase in investment came as Nigeria eased its currency controls, encouraging portfolio investors to return to the West African nation. The United Kingdom and the Netherlands were among the largest contributors of foreign capital, with much of the influx directed towards Nigeria’s banking sector.
As part of its broader economic reforms, President Bola Tinubu’s government has taken steps to revitalise the economy, including allowing the naira to trade more freely. This move is aimed at boosting foreign exchange inflows, alongside the removal of petrol and electricity subsidies, which have been key features of the administration’s reforms.
Additionally, Nigeria’s central bank is planning to further enhance the transparency of currency transactions by automating foreign currency trades from December. This is expected to eliminate market distortions and encourage even more capital inflows.
To tackle inflation and attract yield-hungry investors, the central bank has raised interest rates five times this year, positioning Nigeria as an attractive destination for portfolio investments, particularly in the financial sector.
