Macro instability scares investors from West Africa’s largest markets

Political and economic instability are pushing equity investors away from West Africa’s largest economies according to data from The Africa Report and Business Ghana. Foreign portfolio participation in Nigerian stock trading slumped to 16% in 2022 from 51% in 2018, figures from the Nigerian Stock Exchange show, reflecting how foreign-exchange restrictions make it difficult for investors to access cash after equity sales. 

Foreign investors also have to deal with high inflation, political uncertainty and a complex currency regime with multiple exchange rates and a looming devaluation. Such factors both complicate investor execution and undermine corporate growth.

Meanwhile, the Ghanaian stock market has taken a hit despite the government’s claiming success in its domestic debt exchange. The country’s exchange shared that investors have pulled money out, reducing trading volume. According to the exchange, trading volume fell 95% in January compared with 2022 and value traded plunged 82%.

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