Aftermath 2015 Election; Investors return to Nigeria

By Ayo Fadimu

Many of the investors that left Nigeria in the run up to the last general election have returned back to the country, investigation by West African Business News has revealed. The anxiety over the outcome of the 2015 elections had made many of the foreign investors fled the country to their home country while many simply shifted base.

The Spokesman of Federal Airport Authority of Nigeria (FAAN) Dati Yakubu confirmed that there had been increment in the passengers making use of the Airports across the country. However, he did not specify if they are foreign investors. According to Yakubu, “There has been increment in passenger traffic in Nigerian Airports as corroborated by Nigerian Bureau of Statistics”

An investigation carried out West Africa Business News few days to the election revealed that  some of the foreign airlines operating into Muritala Muhammed International Airport such as Emirates, Delta Airlines, United Airlines, Etihad, Emirates, South African Airways, Kenya Airlines, British Airways, Virgin Atlantic Airways, Ethiopian airlines and the only Nigerian Airline that ply international route, Arik Airline enjoyed large passenger traffic as many investors, expatriates and even wealthy Nigerians fled the country so as not to fall victim to the violence which many, including United States predicted would be the aftermath of the election

A visit to some industries in Ilupeju Industrial Estate, Oregun Industrial Estate,both in Lagos State and Agbara Industrial Estate in Ogun State revealed that many of the foreign Directors, expatriates and workers have returned to Nigeria.
Although two of the spokesmen of multinational companies who spoke to West Africa Business News under anonymity denied that the journey of their foreign Directors was because of fear over the election, they did not respond to question on the reason they returned the election was seen to be peaceful without any bloody aftermath.
“Let’s thank God it was peaceful, they cannot remain in their country forever because this is where their investment is and many Nigerians are also benefitting from their investments in this country” he said.
According to Nigerian Stock Exchange, the fear of the outcome of the poll resulted in foreign investors pulling N846.53 billion from the Nigerian Stock Exchange (NSE) in 2014.
The figure represents 65.7 per cent increase on the N510.78 billion foreign portfolio investment outflow from the stock market in the corresponding period of 2013.
The NSE polls trading figures from major custodians and market operators on their Foreign Portfolio Investments (FPI).
On the contrary, total foreign inflow in 2014 was up 30.32 percent to 692.39 billion from N531.26 billion in 2013.
According to NSE, total transactions at the nation’s bourse increased by 41.83 per cent from N181.97 billion recorded in January to N258.08 billion in December 2014.
According to capital market analysts, the exit of foreign investors from the equities market was a major reason for its poor performance in 2014 during which the market closed with a negative return of 16.14 per cent.
They noted that foreign investors were exiting the Nigerian stock market due to the falling global oil prices, activities of insurgents in the north east of Nigeria, the fear of the outcome of 2015 general elections and the devaluation of the naira.
NSE chief executive officer, Mr. Oscar Onyema, confirmed that the outflow was a major factor in the poor performance of the market.
“In the capital market, bearish sentiments prevailed for most of the year as foreign investors steadily withdrew from the Nigerian market due to currency risk and the recovery of developed economies, and the effects of the US Federal Reserve tapering off its quantitative easing policy,” Onyema said.

However, following the announcement of the General Muhammadu Buhari as the President elect, the NSE ASI went up by 2,635.32 basis points or 8.30 per cent from 34,380.14 to 31,744.82 basis points. Similarly, the market capitalisation of the listed equities appreciated by N903 billion from N11.621 trillion to N10.718 trillion, the value of the naira got a boost at the black market where it sold between N203 and 207 to the dollar. A black market dealer told West Africa Business News in Lagos that the value of the naira had been on an upward swing since the completion of the election.

In the meantime, the Lagos Chambers of Commerce and Industries had expressed hope that the economy will pick up after the successful completion of the 2015 general elections although INEC had declared elections in three states, Abia, Imo and Taraba as inconclusive.

The Director General of the Chambers, Muda Yusuf said, “We want the President-elect to start action immediately he is sworn-in so as to restore the investor’s confidence in the economy, we have met him in the course of his campaign and tabled before him the challenges facing the public sector and we hope that he attends to them”.