Foreign investors have sold off Nigerian stocks valued at $4.5 billion since September last year after a drop in the oil price and the local naira currency coupled with increased political risk ahead of the presidential election later in March and insecurity due to persistent Boko Haram attacks.
Data from the Nigerian Stock Exchange showed that foreign investors increased started exiting the market towards the last quarter of 2014, selling out of the relatively liquid banking, consumer and oil sectors as the price of Brent crude, the bench mark against which Nigeria’s oil is priced, dropped.
The plunge in the oil price has put Nigeria’s currency under pressure and dampened appetite for assets in Africa’s biggest economy and chief oil exporter, prompting the central bank to intervene repeatedly to try to prop up the local currency.
“Export Revenues are down by over 50 percent. Imports are sticking upwards, while people’s expectations are pretty high. to bring peoples expectation down to reality is becoming a problem,” Bismark Rewane, an economist, told eNCA TV.