Coronation Merchant Bank (MB) has said the recent introduction of the Over-the-Counter – Non Deliverable Forwards (OTC-NDF) by the Central Bank of Nigeria (CBN) and the FMDQ Group, will boost the growth of Foreign Direct Investment (FDIs).
The CBN had introduced the much awaited long-dated FX Futures, extending the maximum contract tenor to up to five (5) years, implying that forty-seven (47) new monthly OTC FX Futures contracts, in addition to the existing thirteen (13) contracts have been introduced since February 13, 2020, thereby bringing the total number of open OTC FX Futures contracts at any point to sixty (60).
Speaking to pressmen during a breakfast session and its 2020 outlook titled, “Re-risking the financial system”, in Lagos, the Acting Managing Director, Coronation MB, Banjo Adegbohungbe, said, the introduction of the OTC-NDF by the CBN was an opportunity for foreign direct investments to grow, stressing it was critical for a country like Nigeria to experience a shift from foreign portfolio investment (FPIs) to FDIs. Banjo said, “we think that this initiative from the Central Bank will in the long term encourage foreign direct investment. FDIs are important to GDP growth, to address unemployment, create jobs amongst others. When FDIs are talked about, we are competing with other emerging markets.”