A sharp decline in foreign appetite for the Nigerian capital market has been attributed to various factors such as market uncertainty, political risk, and foreign exchange illiquidity.

Over the past eight years, total foreign transactions executed on the equities market have plummeted by approximately 75 percent.

In January 2015, foreign transactions reached N99.11 billion but dropped to N24.9 billion by January 2023. Similarly, foreign inflow, which accounted for 48 percent of total market activities in 2015, fell to just nine percent in January 2023.

Conversely, domestic transactions have experienced significant growth during the same period, increasing from N90 billion in 2015 to N170 billion in 2023.

The data also reveals a 50 percent decline in total foreign transactions one year after President Buhari’s inauguration in May 2015.

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Market operators are concerned about this sustained capital flight and are urging the government to establish a new foreign exchange market framework that allows market mechanisms to determine exchange rates in a predictable manner.

They emphasize the need for policies and programs that encourage the development of a thriving venture capital market in Nigeria.

Market experts attribute the decline in foreign investor confidence to fears surrounding insecurity, political risks, and forex issues in Nigeria.

The scarcity of forex and capital controls imposed by the Central Bank of Nigeria have trapped many foreign investments within the country.

The unexpected outcome of the 2015 general election and the subsequent economic challenges under President Buhari’s administration further eroded investors’ confidence and caused significant losses in the equities market.