Foreign transactions on the Nigerian Exchange Limited (NGX) reached N785.28 billion in the first 11 months of 2024, a dramatic increase from N411 billion during the same period in 2023. This growth reflects a resurgence of foreign investor interest, potentially driven by economic reforms, favorable policies by the Central Bank of Nigeria (CBN), and improved market conditions. Domestic transactions dominated the market, accounting for N4.128 trillion of the total activity, with foreign transactions contributing 16% of the overall volume in 2024.
Despite the positive growth in foreign investments, domestic transactions continued to lead, with domestic inflows comprising 90.7% of gross transactions as of November 2024. However, domestic inflows dipped 11.8% month-on-month, and foreign inflows dropped by 13.74%, signaling potential challenges in sustaining this upward trend. Economic analysts suggested that factors like stable exchange rates, attractive yields in fixed-income markets, and sector-specific growth might have played a role in bolstering investments but warned of constraints like geopolitical tensions and investor preference for debt securities.
Meanwhile, the naira remained stable at N1,534.05/$1 at the official exchange market, bolstered by CBN interventions. Foreign exchange reserves grew marginally to $40.88 billion, while forward market rates indicated slight increases across various contract terms. Analysts noted that geopolitical risks, including conflicts in the Middle East and Ukraine, continue to affect foreign portfolio inflows, adding that FX liquidity might remain insufficient to sustain naira stability in the near term.
