News
Foreign Portfolio Investors Withdraw N1.87tn under Buhari
Foreign portfolio investors(FPIs) have withdrawn a total of N1.87tn in four years, starting from June 2015, after President Muhammadu Buhari was sworn into office, according to the Punch.
The latest data obtained from the Nigerian Stock Exchange (NSE) showed that the investors withdrew N163.77bn after his re-election in February.
Analysts at the United Capital Plc have described the delayed policy formulation and cabinet formation by President Muhammadu Buhari as a risk to capital inflow to the country.
They noted that in the absence of profound changes in the policy environment, only the FPIs in search of cheap naira assets would dominate capital importation into the county, while Foreign Direct Investments would remain on the sidelines.
An analysis of data obtained at the NSE revealed that the year 2018, the preceding year to the general elections, saw the highest withdrawals of the FPIs in four years, as they withdrew N642.65bn.
Mr Peter Ashade, group chief executive officer, United Capital, said the lack of economic policy reforms would continue to scare the FPIs off equities while policy stability and a double-digit interest rate would promote a further appetite for fixed income instruments.
Data from the National Bureau of Statistics revealed that the FPI flows continued to account for the bulk of capital imported into Nigeria.
In the first quarter of 2019, the amount surged by 56.5 per cent year-on-year to $7.1bn, despite the jitters that trailed the February general elections and the eventual conduct in the Q1.
Total capital imported into the country surged by 34.6 per cent year-on-year to settle at $8.5bn, the highest since the third quarter in 2013.
This revealed that across the three components of capital imported, the FPIs accounted for the bulk of expansion observed.
According to him, weaker capital inflows reflect the impact of waning confidence in the Nigerian economy by foreign investors amid concerns about macroeconomic fundamentals of the Nigerian economy.
Analysts at United Capital said, barring any external shocks, they expected the naira to stabilise this second half of the year.
They said the stability would be buoyed by a sustained foreign exchange intervention and continued FPI inflows.
However, they expressed concerns, saying the “uninteresting macroeconomic environment is scaring the FPIs.”
The report read in part, “However, in Nigeria, we believe the lack of economic policy reforms will continue to scare the FPIs off equities while policy stability and a double-digit interest rate will promote a further appetite for fixed income instruments.
“Clearly, to boost the FPIs appetite for equities, uncertainties must be out of the way and the Central Bank of Nigeria must reduce the attractiveness of risk-free securities as monetary policy in the global economy becomes easier.”
In the second half of 2015, which was the first six months of President Buhari’s tenure, the FPIs withdrew N277.63bn, the highest being in July, when they withdrew N58.83bn.
In 2016, the FPIs withdrew N261.03bn; N435.31bn in 2017 and N642.65bn in 2018.
In the first half of 2019, the foreign investors withdrew N257.81bn, bringing the total withdrawals under the President Buhari regime to N1.87tn.
Alice Tomdio, associate Ddrector, Capital Markets, PwC Nigeria, in an interview with The Punch recently, said, “Once there is any cause to fear, portfolio investors sell out their shares and they come back when the environment is better; all of these create a lot of volatility in the market and may be one of the reasons we do not have a lot of initial public offerings in the country.”
Between 2011 and 2015, foreign transactions consistently outperformed domestic transactions. However, domestic transactions marginally outperformed foreign transactions in 2016 and 2017, accounting for 52 per cent of the total transaction value in 2017.
Also, foreign transactions, which stood at N1.5tn in 2014, declined to N518bn in 2016 but increased significantly by 133 per cent to N1.2tn in 2017. This accounted for about 48 per cent of total transactions in 2017.
Over an 11-year period, domestic transactions decreased by 62.46 per cent from N3.5tn in 2007 to N1.3tn in 2017, meaning foreign investors were dominating the market.
However, there was a significant increase in domestic transactions between 2016 and 2017 by 111 per cent from N634bn to N1.3tn.
Alice Tomdio, president, Independent Shareholders Association of Nigeria, said the economic policies of the country were responsible for the exit of foreign investors.
He noted that when the policies were favourable, investors would come around and if otherwise, they would flee.
Nwosu, who spoke with our correspondent, said it was not advisable for the FPIs to stay ahead of the general elections because there was no assurance given to them when the polls were approaching.
He said, “The FPIs are very careful about their money; these investors have been in this country and have enjoyed a lot. They are not willing to gamble with their money.
“When the situation in Nigeria is showing imminent doom, they will all go away and wait until things stabilise. They will want to make sure that the economic situation does not affect their investment, whereby they will lose money.”
Mr Afolabi Olowookere, head, Economic Research and Policy Management, Securities and Exchange Commission, (SEC) said foreign investors understood the country and could read it well, knowing when to leave and when to stay.
He stated that there were fundamental issues in the economy that needed to be addressed not only to attract but to keep foreign investors.
Olowookere said, “We have some investors that were waiting for the President to appoint his cabinet, while some others do more serious analysis on the interest rates in the country, economic performance, efficiency and liquidity of the market and exchange rate.
“Investors will be interested in what will happen to the exchange rate and how many companies are listed on the Nigerian Stock Exchange. Foreign investors are responsible for over 50 per cent of the transactions on the stock exchange, whether their investments are increasing or reducing.”
He said to attract and retain the FPIs, infrastructure and foreign exchange issues must be addressed.
According to him, looking at the road map of the Central Bank of Nigeria, it can be observed that the apex bank is trying to stabilise the macroeconomic environment, as everybody wants inflation to come down so that interest rate can drop.
Olowookere said, “Investors want to know how much the government is borrowing and the level of debt sustainability. They want to know how much it will weigh in on the country’s capacity to generate revenue.
“They are also interested in the level of liquidity of the market; fortunately, we had two main listings recently, which pushed the market capitalisation from about N10tn to N14tn.
“These companies can also compete with Dangote and the likes; that is if the holders are willing to transact. But investors will always come and go. It’s not just about them bringing in money; it is also about what they can buy with it.”
The World Bank Group has announced the 31-month debarments of United Aviation Services Limited (UNASEL), a transportation services company based in Nigeria, and Air Vice Marshal Alkali Mamu, its owner and president, “in connection with fraudulent practices under the Enhancing Niger Northeastern Connectivity Project,” according to a press release issued by the multilateral development bank.
The statement said that the project aims to enhance connectivity and road safety along the Zinder-Agadez Road section and improve access to basic socioeconomic infrastructure for selected communities in that road section.
However, according to the statement: “UNASEL and Mr. Mamu presented false experience documents in a prequalification application to qualify for a contract under the project. This was a fraudulent practice under the World Bank’s sanctions framework.”
“The debarments make UNASEL and Mr. Mamu ineligible to participate in projects and operations financed by Bank Group institutions. The debarments are part of two settlement agreements under which UNASEL and Mr. Mamu admit culpability for the underlying sanctionable practices,” it added.
The statement further said: “Per the Bank Group Sanctioning Guidelines, the settlement agreements provide for a reduced period of debarment in light of UNASEL and Mr. Mamu’s cooperation.
As a condition for release from sanction under the terms of the settlement agreements, UNASEL and Mr. Mamu commit to developing and implementing integrity compliance measures that reflect the relevant principles set out in the Bank Group Integrity Compliance Guidelines, and Mr. Mamu further agrees to complete corporate ethics training.
UNASEL and Mr. Mamu also commit to continue to fully cooperate with the Bank Group’s Integrity Vice Presidency.
“The debarments of UNA SEL and Mr. Mamu qualify for cross-debarment by other multilateral development banks under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.”
Governor Peter Mbah of Enugu State, has approved the allocation of a parcel of land in Enugu, the state capital, for the establishment of a state-of-the-art Digital Fabrication Centre by the Industrial Training Fund.
Mbah announced this while receiving a delegation from the Industrial Training Fund on a courtesy visit to the Government House, Enugu.
The ITF disclosed this on Friday in a statement signed by its Director of Press and Public Relations, Thomas Ngor.
According to the statement, Mbah described the proposed project as timely and aligned with his administration’s vision of transforming Enugu into a leading destination for investment, innovation and technology-driven industrial development.
He noted that the future of economic prosperity lies in deliberate investments in human capital and emerging technologies, adding that the state has continued to create an enabling environment for innovation, enterprise and sustainable growth.
The governor explained that his administration has made technical education compulsory in the state’s basic education system, with emphasis on digital literacy, robotics and mechatronics to prepare learners for the future of work.
According to him, many traditional trades are now driven by digital technologies, making it imperative to equip young people with relevant technical competencies that will enable them to compete globally and contribute meaningfully to economic development.
Governor Mbah further disclosed that his administration has built smart schools across the state, equipped with robotics centres, mechatronics laboratories and other modern learning facilities, to prepare youths for the evolving global economy.
He noted that artificial intelligence is expected to contribute about $20tn to the global economy in the coming years.
He therefore stressed that the state must be intentional about upskilling its citizens, adding that the establishment of the ITF Digital Fabrication Centre will significantly strengthen the state’s drive to build a knowledge-based economy, foster innovation, promote local manufacturing and create employment opportunities for its growing youthful population.
Earlier, Afiz Ogun, the Director-General of the ITF, who led the delegation, said that upon his appointment by President Bola Tinubu, he was mandated to upskill Nigerian artisans to international standards.
He explained that the Fund subsequently repositioned its technical and vocational skills development efforts through strategic initiatives, including the Skill-Up Artisans Programme, which is designed to train, certify and license Nigerian artisans to international standards.
Ogun disclosed that the Fund had already established a Digital Fabrication Centre in Ikeja, Lagos, with the capacity to produce more than 400 different products. He therefore requested the allocation of land in Enugu State to establish a similar centre with the same production capacity.
According to him, the initiative is aimed at promoting industrialisation, reducing dependence on imports and preparing Nigerians for opportunities in the Fourth Industrial Revolution.
He also reaffirmed the Fund’s readiness to enter into public-private partnerships that will transform Nigeria’s artisanal ecosystem.
Ogun further noted that digital technologies, including artificial intelligence, robotics and computer-aided manufacturing, are rapidly transforming the global economy, making it imperative for Nigeria to deliberately invest in upskilling its workforce to remain globally competitive.
The ITF delegation was later conducted on a guided tour of facilities at one of the smart schools established by the Enugu State Government.
Glovo, a multi-category tech company, has announced its integration into the generative AI ecosystem with the launch of its “Shopping Assistant” for ChatGPT and Claude. Users can now discover retail products, compare prices, and seamlessly order any item using natural conversational language with the AI systems.
The Glovo experience inside such platforms introduces a conversational commerce model that shifts from a search-based web to an intent-based web. Rather than navigating traditional app menus and filters, users can express needs, such as asking for a “last-minute gift for a coffee lover under ₦50,000”, and the assistant handles semantic search, location validation, and product curation.
A Seamless, Concierge-Like Experience
Once both platforms have been connected through either ChatGPT or Claude apps, the user will be able to have a multi-turn dialogue where the assistant remembers context and constraints, such as budget caps. Users receive a visual carousel of up to five highly customised product options available at local stores. Each product displays its image, name, store details and ratings, and price. While the search and discovery experience takes place directly on the Generative AI platforms, selecting a product via the “view on Glovo” button takes the user to the Glovo mobile or web app, where the payment and final purchase are exclusively completed.
Strategic Focus on Retail and Growth
Glovo is prioritising the retail and grocery sectors for this initial launch, capturing the established habit of using AI for product research. Generative AI has driven a significant jump in retail traffic globally, so this first-mover advantage aims to meet customers where they are meeting Gen AI daily, and ensure it captures high-intent organic traffic as search behaviours evolve.
“We’re always looking for ways to meet our customers where they already are. Being available on Claude and ChatGPT means people can discover what Glovo has to offer as part of a natural conversation, with no friction. Glovo has always been about being the everyday app that provides choice and convenience, and this is another step in that direction”, said Shiro Theuri, Chief Technology Officer at Glovo.
How to look for products in the Glovo app through ChatGPT or Claude
- The user must sync ChatGPT or Claude with the Glovo app with the plug-in.
- Once synced, the user must type in @glovo followed by their request.
- The AI platform displays a carousel with 5 available options for the user.
- If the user wants to purchase any of the products or continue searching within the Glovo app, they must click “View on Glovo”, which will redirect the user to the Glovo app or website.
- After the order is confirmed, the store will prepare the item(s) and the courier will head up to the pick-up location. The user will receive the order in minutes.
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