Economy and Business

Another international firm exits Nigeria due to economic challenges

Nigeria faces another significant setback as American fund management firm BlackRock Inc. has announced it is selling off its equity investments in the country citing liquidity challenges in these markets and difficulty in repatriating funds in dollars.

BlackRock Inc. also announced it will leave East African country, Kenya.

In a notice, BlackRock said the “Fund will enter into an extended liquidation period,” during which it will not be managed under its investment objective and policies, “as the Fund will sell down its assets, as determined by BlackRock Fund Advisers, where possible and hold the proceeds of such sales in cash and cash equivalents.”

According to the notice, the fund will depart from its policy of holding at least 80 per cent of the value of its net assets, plus the amount of any borrowings for investment purposes, in equity securities of issuers economically tied to frontier markets during the liquidation period.

This news comes after it emerged in March that BlackRock, one of the world’s largest asset management companies — with a market capitalisation of over $114 billion as of June 13 and $9.1 trillion in assets — had made an investment in the NSE after a four-year break, marking a major win for the struggling exchange.

The firm’s departure follows a pattern of recent exits by foreign companies grappling with Nigeria’s economic instability, currency volatility, and stringent regulatory landscape.

These factors have made it increasingly difficult for businesses to operate profitably and maintain financial stability in the country.

Nigeria, Africa’s largest economy, has been struggling with several economic issues.

Several other major international firms have also reduced their footprint or completely exited Nigeria in recent years.

Show More

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button