According to experts at the 2023 African Economic and Capital Markets Conference, foreign investors may continue to steer clear of Nigeria in 2024 due to concerns over currency instability and other economic uncertainties. The dominance of local investors in the market is projected to persist into the new year. Currency weakness and high inflation are cited as major concerns, and experts suggest measures such as ramping up oil production to strengthen the Naira and addressing the high volume of Naira in circulation.
Key Points:
- Foreign investors are hesitant to enter the Nigerian market due to currency instability and other economic uncertainties.
- The local market has been dominated by local investors, with declining margins attributed to high operating costs and inflationary pressures.
- The hawkish stance of the Central Bank of Nigeria is expected to continue, resulting in higher interest income for banks.
- The US Federal Reserve’s rate hikes are anticipated to lead to capital flight.
- Experts suggest increasing oil production to stabilize the Naira and address currency weakness.
Analysis: The cautious approach of foreign investors towards Nigeria reflects concerns over currency stability and broader economic uncertainties. Addressing these issues, particularly the stability of the Naira, will be crucial in attracting foreign investment. Additionally, measures to manage money supply and stimulate oil production are highlighted as potential strategies. Monitoring the implementation of these measures and their impact on the investment landscape will be essential in assessing Nigeria’s attractiveness to foreign investors in 2024.
