Currency Control Measures Instill Fear in Investors

The International Monetary Fund (IMF) has said investors still express concerns on how to repatriate funds out of Nigeria, due to currency controls introduced last year.

Besides the IMF also submitted that government must roll that would help reduce the rate of inflation in the country to reposition the economy on a steady growth trajectory in 2018, and increase the nation’s access to domestic funds.

The Senior Financial Sector Expert, Debt and Capital Market Instruments Division, Monetary and Capital Markets Department, IMF, Miriam Tamene, who stated this during a visit of IMF Team to the Securities and Exchange Commission (SEC) in Abuja, said investors are still concerned about the repatriation of their funds out of Nigeria, due to currency controls introduced last year.

She described Nigeria as investors’ destination, remained foreign investors’ business hub.
Nigeria introduced capital controls following dollar shortages triggered by a currency crisis last year. The naira hit a record of N520 to $1, prompting the Central Bank of Nigeria (CBN) to restrict fund flows.

The apex bank liberalised the market in April this year, to allow investors trade the naira at market-determined rates in a bid to attract inflows into debt and stock markets.

She said: “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 believe that Nigeria is still investors destination, the main concern most of them had was the fear that they might not be able to exit freely anytime they want 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.” she added.

In his remarks, the Acting Director General of SEC, Dr. Abdul Zubair, said the future outlook appeared good, noting that SEC had already rolled out many initiatives to grow the capital market and increase investors’ confidence.

He added that more initiatives would be rolled out in the long term, to ensure that the Nigerian capital market remained one of the best performing in the world.

The IMF team was in Nigeria for consultations to get update on developments covering all the financial and other key sectors of the economy. The report of their consultations is expected to be presented to the IMF Board in February 2018.

By Helen Oji

The Guardian Newspaper December 21st, 2017

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