The Nigerian Exchange Group (NGX Group) has expressed optimism that President Bola Tinubu’s policy direction will lead to increased inflow of foreign investments into the country.
The NGX said the new administration’s readiness to remove fuel subsidy, unify exchange rates and ensure that investors and foreign businesses repatriate their hard earned dividends and profits would lead to more investment flows into the economy.
Group Managing Director, Nigerian Exchange Group (NGX Group) Plc, Mr. Oscar Onyema said there was bound to be more investment flows in Nigeria, describing Tinubu’s inaugural speech as remarkable.
Onyema said this during the 7th edition of the International Court of Arbitration (ICC) Africa Conference on International Arbitration in Lagos.
Foreign transactions on the NGX have decreased by 38.5 per cent from N616 billion in 2007 to N379 billion in 2022 owing to the foreign exchange (forex) constraints.
Foreign transactions accounted for about 16 per cent of the total transactions in the first four months of 2023 with total foreign transactions of N62.18 billion during the period.
According to him, the initial comments by the president were the right noise for money as money goes to the least resistant places where it can get the best risk adjustment returns and without unnecessary hassles because there is competition across the globe.
“On what we have seen in the last eight years, there has been an outflow of foreign portfolio investments predominantly and so more than half of our markets outside of America, but with these policy changes, you can begin to understand why we are very optimistic that these flows will come back and with it, attract additional flows,” Onyema said.
About the promising signs of growth across Nigeria and Africa, he pointed out that the growing population of young entrepreneurs who are driving their business consistently, increased traction in the Fast Moving Consumer Goods (FMCG) industry and Nigeria being one of the largest producers of oil.
“These signs point to where we have strength, this is where we have competitive advantage in Africa and this is where we can start the journey to get more value added output,” Onyema said.
Chief Executive Officer, Nigerian Exchange (NGX), Mr. Temi Popoola said he was confident the new administration would address forex constraints.
Popoola spoke during the closing gong ceremony to commemorate the centenary anniversary of the International Court of Arbitration (ICC) at the NGX in Lagos.
Welcoming the ICC delegation to the exchange, Popoola, who was represented by the Divisional Head, Capital Markets, NGX, Jude Chiemeka, stated that the exchange was pleased with the growing number of domestic and foreign investors on its platform.
He noted that the NGX trades between $250 million and $300 million a day and added that this has declined due to forex constraints.
“We are hopeful and we are beginning to see that the new administration wants to tackle forex constraints. At the NGX, we will continue to appreciate our partners. We are truly delighted to welcome the ICC to the exchange and at NGX, we will continue to build on partnerships just to ensure that companies will be able to come and raise capital,” Popoola said.
Secretary-General, ICC, John Denton, noted that the ICC with 400 million members in 170 countries, play a critical role in ensuring appropriate advocacy with the government and global business community on effective means of enabling the private sector, provide training and capacity building to link Nigerian businesses unto the extraordinary global platform of the national chamber of commerce.
Denton said one of the key aims of the ICC is to enable global trade while expressing excitement that the market sustained a bullish tilt in three consecutive trading sessions.
According to him, this bodes well especially for investors’ confidence under the new administration and is critical to keeping the market competitive and transparent.
Commending the NGX for its giant strides in innovation and technology, Denton said this aligns with the ICC objectives, which is a critical part of its role in developing the private sector and enabling the private sector to operate effectively.
“We are looking at 30-40 sovereign states with serious debt and liquidity issues and yet on a global basis, that is dismissed as something to be worried about and not something to be acted on.
“What that means is that the advanced economies are not prepared to work harder on the debt forgiveness issue, resolution issue because if these countries fall over, it will be terrible. We think this is fundamentally wrong and that is what we are working on. Working with a group like the NGX who understand what is required to keep the markets moving will be very helpful too,” Denton said.
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