The total amount of domestic transactions on the bourse in 2023 reached N2.9 trillion, higher than the N362.8 billion recorded by foreign transactions during the same period.Â
This is because capital flight, which is precipitated by legacy issues of foreign exchange (FX) liquidity and other macroeconomic challenges, continues to have a negative impact on foreign transactions.
Approximately 84% of all transactions in 2022 were conducted within the country, whereas just 16% of all transactions during the same year were conducted outside the country.
According to the November issue of the NGX report on domestic and international portfolio involvement in equities, domestic transactions on the Nigerian Exchange Limited (NGX) fell from N3.6 trillion in 2007 to N1.9 trillion in 2022, a loss of 45.3% over a 16-year period.
Between 2007 and 2022, there was a 45.3% decrease in domestic transactions and a 38.5% reduction in overseas transactions, from N616 billion to N379 billion.
The nation’s exchange saw a 34.08 percent increase in total transactions as of November 30, 2023, from N220.9 billion (about $243.93 million) in October 2023 to N300.7 billion (around $319.15 million) in November 2023.
Comparing the November 2023 performance to the November 2022 performance (N104.28 billion), it was found that there was an 188.3% rise in total transactions.
A more thorough examination of all the transactions carried out in November 2023 compared to the previous month showed that the overall amount of domestic transactions rose from N187.6 billion in October to N229.30 billion in November 2023, a 22.24 percent rise.
Comparably, between October 2023 and November, the total amount of foreign transactions climbed by 113.9 percent, from N33.36 billion (about $36.83 million) to N71.37 billion (around $75.76 million).
Additionally, institutional investors made a 20% gain over regular investors. Retail transactions grew 7.3% from N86.5 billion in October 2023 to N92.8 billion in November 2023, according to a comparison of domestic transactions in October 2023 and November 2023.
Comparably, from N101.12 billion in October 2023 to N136.5 billion in November 2023, the institutional composition of the domestic market grew by 35.01 percent.
In response to the article, Eric Akinduro, President of the Ibadanzone Shareholders Association of Nigeria, stated that because of Nigeria’s negative business climate, both domestic and foreign investors are leaving the country to open offices in its neighbouring nations.
“The business environment is unfavourable, and neither domestic nor international investors are benevolent organisations. They are currently transitioning to a more profitable economy in order to increase profits.”
Nigeria’s foreign exchange crisis would continue to be a deterrent to investment in the country unless we reform our economy.
“A high rate of inflation will have an impact on business performance, which will ultimately have an impact on return on investment. To boost the economy, the government must act decisively,” he said.
