BlackRock Inc., a prominent American fund management firm, has announced its decision to sell off its equity investments in Nigeria, citing liquidity challenges and difficulties in repatriating funds in dollars. The firm also plans to exit Kenya.
In a notice, BlackRock stated that 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.”
During this liquidation period, the fund will not adhere to its policy of maintaining at least 80 percent of its net assets in equity securities tied to frontier markets. Instead, the firm will liquidate assets as deemed feasible by BlackRock Fund Advisers.
This development comes on the heels of BlackRock’s significant investment in the Nigerian Stock Exchange (NSE) in March, following a four-year hiatus, which had been seen as a positive sign for the struggling exchange.
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BlackRock’s departure is part of a broader trend of foreign companies reducing their presence or completely exiting Nigeria due to economic instability, currency volatility, and stringent regulatory conditions. These factors have increasingly hindered business operations and profitability in Africa’s largest economy.
Several other international firms have also scaled back their operations or exited Nigeria in recent years, highlighting the ongoing economic challenges in Nigeria.
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