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Nigeria could see greater foreign investment flows in the wake of sharp declines this year of its currency the Naira, according to Citigroup Inc.
“Countries where we’ve seen significant FX adjustments are clear winners from an investment perspective,” George Asante, Citi’s head of markets for Sub-Saharan Africa, said in an interview with Bloomberg.
“All these from a local market perspective offer opportunities.”
Nigeria’s naira is the worst-performing African currency this year, slumping more than 40% against the dollar as the country scrapped fuel subsidies and a disastrous multiple exchange-rate system.
The removal of subsidies was a “very important reform” for Nigeria, while moves to merge multiple exchange rates will also help to boost liquidity, Asante said.
The next task for the government is to make sure the official FX market can function smoothly in the wake of the changes, he said.
“I believe that this will be a significant catalyst for flows back into the Nigerian market,” Asante said.