Foreign Outflows Rise on Nigerian Exchange Despite Improved Inflows

Foreign investor withdrawals from the Nigerian equities market increased in February, even as inflows recorded notable growth, reflecting continued cautious sentiment among offshore investors.

Latest data from the Nigerian Exchange Limited shows that foreign outflows rose by 9.12 percent to N72.32 billion, compared to N66.28 billion in January. Meanwhile, foreign inflows climbed significantly by 39.39 percent to N66.71 billion, up from N47.86 billion in the previous month.

This resulted in a net outflow of N5.61 billion, an improvement from the N18.42 billion recorded in January, indicating a slight easing in capital flight but not a reversal of the trend.

Total foreign transactions rose by 21.81 percent to N139.03 billion, reflecting increased activity despite the imbalance between inflows and outflows. Analysts say the data points to tentative re-entry by foreign investors, although profit-taking and risk aversion remain dominant factors.

Domestic investors continued to drive market activity, accounting for over 90 percent of total transactions. Institutional investors led participation with N854.83 billion, significantly outpacing retail investors at N548.50 billion.

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Overall transactions surged by nearly 79 percent month-on-month to N1.542 trillion, highlighting strong domestic engagement even as foreign participation declined to 9.01 percent of total market activity.

On a year-to-date basis, the imbalance persists. Foreign inflows stood at N114.57 billion, while outflows reached N138.60 billion, resulting in a net outflow of N24.03 billion.

The trend underscores lingering concerns about Nigeria’s macroeconomic environment, including currency volatility, inflation, and policy uncertainty, which continue to influence investor decisions.

Despite these challenges, the strong presence of domestic investors reinforces the structural resilience of the Nigerian equities market, even as efforts continue to attract sustained foreign capital inflows.