BlackRock’s iShares worth $400 million issues notice to exit Nigeria

“Currency conversions, including conversion of Nigeria’s currency, the naira, will impact the timing of the fund’s liquidation,” said BlackRock.

ADEFEMOLA AKINTADE • June 13, 2024

BlackRock ishares (credit: Ledger insight)

BlackRock, one of the world’s top asset managers, announced it would liquidate its iShares exchange-traded funds (ETFs) worth $400 million over unprofitable business environments in Nigeria and Kenya, particularly the challenge of currency repatriation worsened by the naira devaluation.

iShares Frontiers, which invested millions of dollars in emerging market equities in Nigeria and Kenya over the years, fixed its last trading day for March 31, 2025, when the extended liquidation is anticipated to conclude.

“The board of directors of the company approved a proposal to liquidate the fund. In light of persistent liquidity challenges in certain frontier markets, including among other things, delays or limits on repatriation of local currency, the board determined that it is in the best interest of the fund and its shareholders for the fund to liquidate,” said iShares said in a recent statement.

The company said it was opting for an “extended liquidation” given the significance of the naira conversion on the liquidation, which cannot easily be predicted.

“Currency conversions, including conversion of Nigeria’s currency, the naira, will impact the timing of the fund’s liquidation. As a result, the fund will enter into an extended liquidation period,” BlackRock’s iShares stated. “After market close no earlier than August 12, 2024, but on a date as soon as practicable, the fund will cease trading and the creation and redemption of creation units.”

Already, the company has liquidated $5.2 million of its shares in Kenyan companies like Safaricom ($2.8 million), Equity Group ($1.5 million), and KCB Group ($885,000), which are quoted on the Nairobi Securities Exchange (NSE).

The planned exit of BlackRock’s iShares was another dent in Nigeria’s economic scorecard as the one-year-old President Bola Tinubu’s administration grapples with Nigeria’s dwindling economic fortunes.

Diageo, the parent company of the Guinness brand, on Tuesday announced it was selling its controlling shares to a third-party venture called Tolaram after recording an over N61 billion loss in its financial year that ended March 31.

UK pharmaceutical giant GlaxoSmithKline and tech giant Microsoft have also shut down their business operations in Nigeria.

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