Foreign direct investors have tripled their asset disposals in Nigeria, reaching a staggering $200 million, according to the Central Bank of Nigeria’s (CBN) economic report for the third quarter of 2023.
This figure underscores a growing trend of foreign subsidiary divestiture, with multinational corporations transferring business activities from Nigeria.
The foreign direct investment (FDI) segment witnessed a divestment of $200 million, a significant increase of 186% from $70 million in Q2 2023, primarily due to divestment in direct investment equities.
However, the CBN report also highlights a substantial influx of $2.86 billion, compared to $2.23 billion in the previous quarter.
This 28.25% increase is attributed to heightened portfolio investment, particularly in debt instruments by non-residents.
The CBN report read:
Further analysis reveals that ‘Other investment’ also experienced a divestment of $310 million, contrasting with a $20 million inflow in the preceding quarter.
In an earlier report on capital importation for Q3 2023 by the National Bureau of Statistics (NBS), Other Investment accounted for 77.56% ($507.77 million) of all capital importation, followed by Portfolio Investment ($87.11 million or 13.31%) and Foreign Direct Investment (FDI) with $59.77 million or 9.13%.
It was further observed that total financial assets disposed was $870 million in Q3 2023. This contrasts with the $980 million acquisition of Q2 2023.
This shift is attributed to the disposal of direct and other investments, including equity and investment fund shares, alongside a reduction in the holdings of foreign currency and deposits by residents.
On the flip side, portfolio investments recorded a higher net acquisition of $70 million compared to $50 million in Q2 2023.
The CBN report read:
