Written by Sarah NEGEDU

Low liquidity: fear grips investors over trapped funds

The current economic condition in Nigeria characterised by inflation and low liquidity, could be sending negative signals to foreign investors, as a number of them are skeptical about being able to retrieve their funds whenever they decide to pull out their investments.

The International Monetary Fund, IMF, last week  said though a number of investors have indicated interest in the country, they still nurse fear that they may not be able to retrieve their funds anytime they decide to exit.

IMF’s Senior Financial Sector Expert, Debt and Capital Market Instruments Division, Monetary and Capital Markets Department, Miriam Tamene, said this in a statement issued by the Securities and Exchange Commissions, SEC, in Abuja.

She said the Fund was pleasantly surprised by the numerous indication of interest it has received from investors eager to do business in Nigeria, stressing that a conducive business environment would further drive investors interest in the country.

Tamene who stated this when she led a team on a visit to the SEC headquarters, urged monetary and regulatory authorities in Nigeria to roll out policies that would bring down the inflation rate in the country as well as increase access to domestic funds.

This, she noted, would ensure that the economy attained further growth in 2018. “At the annual meetings of IMF, we were pleasantly surprised when we saw many investors interested in the Securities Market in Nigeria.

“A lot of people thought that Nigeria is still investors destination, the main concerns most of them had was the fear that they may not be able to take out their money anytime they want to hence they are being very watchful.

“Investors are interested in Nigeria, but with difficulties they had in getting their money out recently, that confidence is not there yet.

“It has improved though, but they are still watching. It is still so much fragile and not what they can take for granted just yet,” she added.

The statement also quoted the Acting Director-General of SEC, Dr. Abdul Zubair, as saying “the future outlook appeared good as several initiatives had been rolled out by the SEC to help grow the capital market.”

Zubair said the initiatives would increase investors’ confidence and more initiatives would be rolled out subsequently to ensure the Nigerian capital market remained one of the best in the world.

The IMF team was in Nigeria for consultations to get update on developments covering all financial transactions as well as key sectors of the Nigerian economy. The report of their consultations is expected to be presented to the IMF Board in Feb. 2018.

 

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