Offshore Investors Stake $2.3bn on Naira-Denominated Assets in Two Months

By Aduragbemi Omiyale

The Central Bank of Nigeria (CBN) has revealed that about $2.3 billion was invested by foreign portfolio investors (FPIs) in Naira-denominated assets between January and February 2024, almost at par with the $3.9 billion recorded in the whole of 2023.

The acting Director of Corporate Communications of the CBN, Mrs Hakama Sidi Ali, attributed this to the renewed confidence of offshore investors in the country’s economy.

Addressing journalists in Abuja on Thursday, she said last month, Nigeria also witnessed a 433 per cent rise in diaspora remittances to $1.3 billion in February from $300 million in January.

She further noted that the recent upward review of the benchmark interest rate by 4.00 per cent to 22.75 per cent by the central bank has continued to drive foreign exchange (FX) inflows into the country.

According to her, offshore investors have been pumping funds into short-term sovereign debt instruments like treasury bills and bonds because of the attractive rates.

The apex bank spokesperson revealed that based on the government securities issuances of March 1 and 6, 2024, foreign investors accounted for over 75 per cent of the bids received at the auctions.

On Wednesday, the CBN auctioned treasury bills valued at N337.9 billion through the primary market, but received bids worth about N1.7 trillion, showing a strong appetite for the bills. It eventually allotted N1.3 trillion to investors. The bank sold the T-bills to subscribers at a stop rate as high as 21.49 per cent.

She explained that the oversubscription of the Naira-denominated assets showed that offshore investors have confidence in the economy.

“The bank’s data indicates that overseas remittances rose to $1.3 billion in February 2024, more than four times the $300 million received in January.

“Foreign investors purchased more than $1 billion of Nigerian assets last month, with total portfolio flows of at least $2.3 billion recorded thus far in 2024 compared to US$ 3.9 billion seen in total for last year,” Mrs Ali stated.