Nigeria’s FPIs drop by 77.4% in Q1

Foreign Portfolio Investments (FPIs) in Nigeria declined by 77.4 per cent year-on-year in the first quarter of 2021 to stand at $974.1 million, data obtained from the Central Bank of Nigeria (CBN) has shown.

Portfolio investments dropped from $4.31 billion recorded in Q1 2020 to $974.1 million in Q1 2021. Quarter on quarter, however, this was a 1,635per cent increase compared to $56.15 million recorded in the previous quarter (Q4 2020).

FPIs generally consist of securities and alternative foreign financial assets that are passively held by foreign investors.

Investments in money market instruments stood at $808.57 million, accounting for 83per cent of the total foreign portfolio investments in the review period.

Investments in bonds followed with a total of $138.7 million (14.2per cent) invested while $26.88 million was directed towards equity.

In terms of monthly investments, the highest FPI was recorded in February with $503.17 million, while January and March portfolio investments stood at $30.72 million and $440.25 million respectively.

A cursory look at the domestic and foreign portfolio investment report of the Nigerian Exchange (NGX), revealed that a sum of N60.11 billion was recorded as foreign inflows in the first quarter of 2021, representing a 7.9per cent decline compared to N65.27 billion recorded in the corresponding period of 2020.

Meanwhile, foreign outflows surpassed inflows in the period, with a total of N90.12 billion recorded as foreign outflows while domestic transactions stood at N526.3 billion.

The Nigerian economy has endured a significant downturn in recent times, ravaged by the covid-19 pandemic, banditry, and insurgency to list a few.

Consequently, the economy has been pushed into stagflation, with Nigeria’s unemployment rate at 33.3 per cent as of Q4 2020. Headline inflation was at 18.12per cent in April 2021 while food inflation stood at 22.72per cent in the same month.

According to the 2020 doing business report of the World Bank, Nigeria ranks 131st with a score of 56.9 in terms of ease of doing business.