Portfolio funds dominate Nigeria’s Foreign capital as FDI stalls
The Federal Open Market Committee (FOMC) on September 16 raised the federal funds target range by 25 basis points to 3.75–4.00 percent, its first increase since 2023. The Fed said the move was aimed at supporting a return of inflation to its two percent target.
In an analysis by Dele Oye, chairman of AERE, the rate increase represents a warning for Nigeria as higher US yields could make dollar-denominated assets more attractive to global investors and raise the threshold for emerging markets seeking foreign capital.
Oye said Nigeria would need to demonstrate that its economic reforms were credible, predictable and capable of generating sustainable returns for investors.
“The Federal Reserve’s increase is a yellow light for Nigeria, not a fire alarm. It means dollars may become more expensive, global investors may become more selective, and Nigeria will have to prove again that its reforms are real, predictable, and useful beyond the trading screen,” he said.