Proposed Solutions To Foreign Exchange Illiquidity In Nigeria: Note To Foreign Investors And The International Market

The current state of the foreign exchange market in Nigeria has made every investor apprehensive. Cautious foreign investors continue to withdraw their investments, and those daring enough to invest in Nigeria do not have veritable solutions to their concerns on the seamless repatriation of their capital.

According to United Capital’s Nigerian Equities Market H1-2022 Review and Outlook, domestic investors maintained domination of activities at the local bourse, controlling 85.3 per cent of total transactions, leaving foreign investors with 14.7 per cent.[i] The report cited uncertainties in the economy such as political risk, inaccessibility of foreign exchange, and other global trends as factors that have contributed to the unprecedented exit of foreign portfolio investors (FPIs),and the reduction of foreign direct investment (FDIs) in Nigeria.

This article proposes solutions to the issue of foreign exchange illiquidity in Nigeria and answers to the concerns of foreign investors and the international market.