In April 2024, Nigeria saw a big jump in money leaving the country. A total of $1 billion left, which was much more than the $740 million from March.
This happened mainly because foreign investors took their money back. They took away $780 million, which is about 78% of all the money that left.
Compared to May 2024, when less money left, April was much higher.
Loan Repayments Reach $160 Million
The Central Bank of Nigeria shared in its April 2024 report that paying back loans was also a big part of the money leaving. It went up from $120 million in March to $160 million in April.
Another part of the outflow was money going back to foreign investors. This fell to $40 million from $90 million in March.
The report stated:
“Money leaving increased because of foreign investors taking their money back and higher loan repayments. The total outflow rose to $1.00 billion, from $0.74 billion in the previous month. A breakdown showed that foreign investors took back $0.78 billion, up from $0.53 billion.
“Paying back loans climbed to $0.16 billion from $0.12 billion. Money going back to investors, however, fell to $0.04 billion from $0.09 billion. Of the total money leaving, foreign investors taking back money made up 78.00%, loans 16.00%, and dividends 4.00%. Other outflows made up the rest.”
Newslodge noted that money leaving the country saw big changes this year. It was highest in February 2024 at $1.31 billion, dropped to $740 million in March, and rose again to $1 billion in April. Most of this was from foreign investors taking their money back, especially in February.
Things to Know
Capital reversal means when foreign investors take their money out of a country. They might do this because of economic problems, changes in policies, or better investment opportunities elsewhere. This involves selling stocks, bonds, or other assets and moving the money back to their home country or another safer place.
When this happens, there is a high demand for foreign currencies like the dollar. Investors convert their money from naira to these foreign currencies. This can make the naira weaker, making imported goods more expensive and causing higher prices overall.
Earlier, Newslodge reported that Nigeria’s foreign exchange reserves dropped by $2.16 billion in 29 days, as the Central Bank tried to keep the naira stable in April. The reserves fell to the lowest level in six years by April 15, 2024.
The FMDQ Markets Monthly Report for April showed that the spot foreign exchange market turnover was $9.12 billion (N11.14 trillion). This was a 27.68% drop from $12.61 billion in March 2024.
Despite this, the naira got stronger against the US Dollar. The average exchange rate was N1,244.66/$1 in April, better than the N1,524.04/$1 in March 2024.
The report also mentioned that the exchange rate varied less in April compared to March. In April, the naira traded between N1,072.74/$1 and N1,419.11/$1, while in March it ranged from N1,300.43/$1 to N1,627.40/$1.