Foreign Capital Inflows Surge 148% In Q32017

Foreign capital inflows into Nigeria increased by 148% to $4.15 billion during the third quarter of 2017.
Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company Limited said the phenomenal increase is as a result of renewed investor confidence.
A further breakdown shows that foreign portfolio investment (FPI) – hot money, accounted for 67 per cent of inflows, while foreign direct investment (FDI) and others accounted for the remainder part.
“Since FPIs are considered to be highly volatile and politically sensitive, policy makers are usually wary in relying on them. Some nations have restricted the tenor of FPIs to a minimum stay of three years”, said Rewane.
In 2018, with the expectant increase in US interest rates, these investments could be subject to capital flow reversals. In the run-up to a general election, any outward investment flows could be debilitating.
Thankfully, oil prices are now 17 per cent higher than 2017’s average. This means that if they hold at current levels, oil revenues may help mitigate the consequences of any form of capital flight.

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