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After months of threats that Nigeria’s economy is still susceptible to recession shocks and steady calls for devaluation of the currency, the International Monetary Fund (IMF), has made a U-Turn, saying the same economy is still on international investors’ radar despite currency controls being implemented in the country.
It however, said worries about repatriating funds out of Nigeria following currency controls last year still dominates investor fears.
Miriam Tamene, an IMF senior financial sector expert, said there is interest in Nigeria’s securities market. However, investors were being careful because fears of getting trapped still exist.
The Central Bank of Nigeria (CBN), had introduced capital controls following dollar shortages triggered by a currency crisis last year when the naira hit a record of 520 to the dollar. As part of control, CBN technically began flows restriction by delisting 41 items from seamless dollar access.
In April the bank liberalised the market to allow investors trade the naira at market-determined rates in a bid to attract inflows into debt and stock markets.
The stock market has gained 45 per cent so far this year, helped by demand for consumer goods and banking shares after the central bank lifted currency restrictions for investors.
The new song of the IMF came after her team visited Nigeria’s Securities and Exchange Commission (SEC) as part of consultations on developments covering the economy. The report of the consultation will presented to IMF board in February.
The Fund official averred that “Investors are interested in Nigeria, but with difficulties they had in getting their money out recently, that confidence is not there yet,” Tamene said in a statement released by the SEC”.