The volume of foreign portfolio investment in Nigeria declined for the second consecutive year, falling by 34% in 2021 to $3.39 billion, compared to $5.16 billion in 2021. It is the lowest amount of FPI attracted by the country in the last five years. This is contained in the capital importation breakdown data released by the Central Bank of Nigeria.
While the decline in foreign portfolio investment is partly a consequence of the global lockdowns and travel restrictions caused by COVID19, the data suggest that domestic investors are taking over the local financial market.
In 2019 FPI recorded in Nigeria was $16.38 billion, which by 65% to $5.16 billion in 2020. A further decline happened in 2021, resulting in $3.86 at the end of the year.
Factors such as inflation and insecurity also have contributed to the loss of faith by foreign investors while a severe shortage of foreign exchange has been a sore point for the government and the Central Bank. The ease of doing business index lists Nigeria at 131 out of 190 economies across the world.
