With a remarkable gain of about 110 per cent in just two years, the Nigerian capital market has sustained the unprecedented momentum that greeted the dawn of President Bola Tinubu’s administration. Despite the hardship triggered by sweeping macroeconomic reforms, investors have shown a clear resolve to look beyond short-term challenges, anchoring their confidence on prospects for medium- to long-term stability and growth. Deputy Group Business Editor TAOFIK SALAKO reports that the renewed hope promised by the Tinubu administration is clearly mirrored in the bullish outlook of the Nigerian capital market
The capital market is often regarded as the truest reflection of an economy. Beyond its catalytic role in financial intermediation, it stands as the stronghold of private capital, characterised by its far-reaching vision, swift movement and dispassionate assessment. Policy successes and failures become readily apparent through stock market trends—whether at the corporate, national or sub-national level.
Although the market can react spontaneously to breaking news or emerging issues, it possesses an almost instantaneous self-correcting mechanism. Emotional or impulsive reactions are quickly realigned with verifiable facts, rigorous data and thorough analysis. This is why the saying goes: nobody fools the market. This dynamic ties closely to concepts such as “hot money,” capital flight and portfolio investment, illustrating how capital movement and stability depend on perceptions of macroeconomic stability. While the time horizons for assumptions may vary, there is invariably a point of convergence.
Over the past two years, the capital market has narrated the story of President Bola Tinubu’s administration—a story marked by promises, hopes, challenges, achievements, and growing confidence. From the initial enthusiasm that greeted his election victory to the unprecedented rally at his inauguration on May 29, 2023, the market has navigated the pains of macroeconomic reforms with foresight and resilience.
Today, benchmark indices in the Nigerian capital market boast more than 100 per cent capital gains over Tinubu’s two-year tenure. As the administration’s second anniversary approaches, all market indices—from value-based returns to participation, diversity, innovation, and outlook—reflect a continued positive endorsement of Tinubu’s Renewed Hope Agenda. This is significant, as the government is anchoring its ambitious $1 trillion economy goal substantially on the capital market as the cornerstone of the private sector. The strategy involves unlocking private sector potential alongside large-scale infrastructure investment to drive Nigeria’s GDP to $1 trillion by 2030.
For example, the All Share Index (ASI)—the broad-based index tracking all shares listed on the Nigerian Exchange (NGX)—opened this week at 109,028.62 points. This represents a gain of 109.78 per cent from the 52,973.88 points recorded at the start of Tinubu’s administration on May 29, 2023, equating to a net capital gain of approximately N31.67 trillion on an index-adjusted basis. Similarly, the aggregate market value of all quoted equities rose from N28.845 trillion on that date to N68.752 trillion this Monday—an increase of 138.35 per cent or nearly N39.91 trillion in under two years.
A rally for the President
In a way, the market has rewarded the early adopters of the Tinubu’s administration while stronger macroeconomic outlook continues to build the momentum. The inaugural speech of Tinubu had triggered a scramble for Nigerian equities, with the stock market posting its best performance in two and half years on the first trading day after the Monday, May 29th inauguration.
Comparative analysis of the first trading day after inauguration of a new president since 1999 showed only three positive marks, with the 5.22 per cent rally for Tinubu, the highest the market has ever witnessed. First day equity market response to the 1999 inauguration of President Olusegun Obasanjo was negative, with the market dropping by 0.07 per cent. The 2007 inauguration of President Umaru Musa Yar’Adua was almost flat, with a tilt towards positive. The 2011 inauguration of President Goodluck Jonathan was greeted with a modest 0.14 per cent. The 2015 inauguration of President Muhammadu Buhari was negative, with a first-day return of -0.77 per cent. Then, in an all-week rally, the equities market closed the inauguration week with net capital gain of N1.55 trillion. Tinubu, in his inauguration speech, had shown a high level of awareness by directly addressing investors’ concerns on multiple taxations, returns repatriation and forex among others. “I have a message for our investors, local and foreign, our government shall review all their complaints about multiple taxation and various anti-investment inhibitions. We shall ensure that investors and foreign businesses repatriate their hard earned dividends and profits home,” Tinubu said, immediately after being sworn in at the Eagle Square, Abuja. The reforms that followed, as excruciating as they were, bore true for the investing public. The government abolished the absolute, fixed-exchange rate regime for a market-driven regime amidst a wave initiatives that have been credited with restoration of confidence and stability in the forex market. It launched tax reform and redirected the fiscal balance with the removal of the bogus petrol subsidy.
By the end of 2023, the stock market closed with full-year average return of 45.90 per cent, equivalent to net capital gains of N12.81 trillion, one of the three highest returns globally. In 2024, the market turned in average return of 37.65 per cent, placing Nigeria as one of world’s three best-performing stock markets. Investors netted N15.41 trillion in capital gains in 2024, providing a cushion for the otherwise inflationary environment.
Most analysts expected the Nigerian market to remain positive in 2025. Median estimate of projections on the outlook for the Nigerian stock market indicated that the market could sustain its double-digit return. A more bullish outlook suggests that the Nigerian market could pool capital gains in excess of N20 trillion, with market capitalisation of quoted equities expected to cross the landmark N100 trillion mark on the back of capital gains and major new listings. The ASI opens this week with average year-to-date return of 5.93 per cent.
A mix of foreign and domestic
The performance of the Nigerian market has been driven by increased inflows of foreign investments combined with resilient domestic demand. In both equities and debt segments, sustained investors’ appetite has enabled the market to function along its traditional line as the fulcrum for the private and public sectors.
Total transactions at the Nigerian stock market rose to N2.23 trillion in the first three months of this year, its highest quarterly turnover. Official trading report at the NGX showed that total transactions at the stock market rose to N2.23 trillion in the first three months of this year, an increase 44 per cent on N1.55 trillion recorded in comparable period of 2024. The first quarter 2025 performance represented a new record for the market, driven by steady domestic transactions and upsurge in foreign transactions.
Foreign portfolio investments (FPIs) now accounts for more than one-third of transactions at the Nigerian market, as against the situation in the previous year when foreign transactions amounted to about one-seventh of the market’s turnover.
The latest quarterly report showed that total foreign portfolio transactions rose by 281.9 per cent from N213.18 billion in first quarter 2024 to N814.05 billion in first quarter 2025. The proportion of participation by FPIs increased from 13.77 per cent in first quarter 2024 to 36.47 per cent in first quarter 2025, the highest so far.
Domestic investors have also shown sustained strong appetite for quoted equities with a turnover of N1.42 trillion in first quarter 2025 as against N1.33 trillion in first quarter 2024, representing a modest increase of 6.2 per cent. The proportion of domestic investors’ transactions however dropped from 86.23 per cent of total market turnover in first quarter 2024 to 63.53 per cent in first quarter 2025.
The report indicated upbeat across the buy and sell sides of foreign transactions. Foreign inflows jumped by 321.6 per cent from N93.37 billion in first quarter 2024 to N393.68 billion in first quarter 2025. Outflows, on the other hand, increased by 250.9 per cent from N119.81 billion in first quarter 2024 to N420.37 billion in first quarter 2025.
FPI transactions at the NGX had more than doubled from N410.62 billion in 2023 to N852.03 billion in 2024. The increase in foreign transactions supported resilient domestic demand to push NGX to its highest-ever turnover of N5.587 trillion in 2024. It had recorded N3.578 trillion in 2023. There is expectation that the market may surpass its 2024 turnover this year.
A January 2025 report at the Nigerian Autonomous Foreign Exchange Market (NAFEM) showed that inflows from foreign sources into the Nigerian forex market rose to their highest level in more than five years. Monthly inflows to the forex market rose by 53.5 per cent to $4.74 billion in January 2025, from $3.09 billion recorded in December 2024. The surge was particularly driven by inflows from foreign sources, which jumped to its highest level in more than five years, with an increase of 192.1 per cent from $790.3 million in December 2024 to $2.31 billion in January 2025. With these, foreign sources accounted for 48.8 per cent of total inflows into the forex market while collections from local sources accounted for 51.2 per cent.
A recent report by the Central Bank of Nigeria (CBN) showed that the value of forex inflows to the economy through the International Money Transfer Operators (IMTOs) rose to $4.76 billion in 2024, 44.5 per cent increase on $3.30 billion recorded in 2023. This underscored the confidence of non-corporate sources in the forex market.
Lagos billionaire, Mr Femi Otedola, summed up the drumbeat for the rallying market- investors are increasingly confident of the macroeconomic outlook.
According to him, ongoing reforms by Tinubu’s administration have repositioned the economy and given investors renewed confidence to stake on a long-term growth and development of the Nigerian economy.
Otedola, Chairman of First Holdco Plc and Geregu Power Plc, two publicly quoted companies, described Tinubu as a “bold and visionary” leader, whose courageous reforms have helped in reigniting investors’ hopes in the Nigerian economy.
Otedola, who is scaling up his investment in Nigeria’s oldest surviving banking group, First Holdco Plc, to N320 billion, said Tinubu “deserves credit for championing tough but necessary reforms” that has given the economy a much-needed fillip.
Speaking last week at the annual general meeting of First Holdco, Otedola noted that the pragmatic and courageous monetary reforms embarked upon by the CBN Governor appointed by Tinubu, Mr. Yemi Cardoso, are resetting the Nigerian financial system.
“His actions are restoring credibility to the financial system and giving investors like me the confidence to commit long-term capital to this country,” Otedola said, in reference to monetary reforms by the apex bank.
While several companies had suffered losses due to changes in the forex market, corporate decision-makers favoured the reforms than the chaos of the past. Group Managing Director, Vitafoam Nigeria Plc, Mr. Taiwo Adeniyi, said while the implementation of a market-driven mechanism for the forex market had faced initial challenges and several companies recorded forex-related losses, the new forex system has potential to address the flaws of the previous managed-float system.
Manufacturers and other forex users had faced significant challenge of access to forex under the previous hugely subsidised managed-float forex system, forcing Nigerian companies to build up forex exposures to international creditors and parent companies. The liberalisation of the forex market saw several Nigerian companies, including Vitafoam Nigeria, with uncleared forex obligations incurring forex-related losses.
“But the worst is over on the challenges of forex with the liberalisation policy of the federal government,” Adeniyi, whose company had recorded forex loss of N12.7 billion during the year ended September 30, 2024, said.
Most companies that had posted forex-related losses are bouncing back with impressive profits. Vitafoam Nigeria returned to profit by the second quarter of its current business year. Six-month report for the period ended March 31, 2025 showed that Vitafoam recorded net profit of N6.70 billion compared with net loss of N5.58 billion by March 2024. Cadbury Nigeria, which suffered forex-related losses and had to undertake debt conversion, rebounded to profitability in first quarter 2025. The three-month report for the period ended March 31, 2025 showed that Cadbury Nigeria reversed its loss of N7.32 billion in first quarter 2024 with a net profit of N5.98 billion in first quarter 2025.
Sovereign risk falling
Nigeria’s sovereign risk has fallen to its lowest in five years on the back of the economic reforms. Data tracked by Bloomberg showed that Nigeria’s sovereign risk spread has fallen to the lowest level since January 2020, erasing the premium accumulated during the pandemic and subsequent strain on its economy. “Nigeria is finally getting a favourable nod from investors, pushing stocks higher and bond yields lower as painful reforms restore confidence,” Bloomberg reported.
According to the report, while United States President Donald Trump’s widening trade war has taken emerging markets on a wild ride, Nigeria has quietly held its own, attracting foreign capital reassured by currency reforms and other measures designed to revive the economy of Africa’s most-populous nation. “Nigeria appears to be back in business as long-awaited economic reforms take shape,” said Emre Akcakmak, portfolio manager at East Capital.
Key measures attracting investors included improved currency liquidity, leeway for investors to repatriate their profit, and the stable naira. “Portfolio inflows have likely been supported by improved confidence amid key structural reforms, better forex market functioning and moderating dollar-naira volatility, as well as the still-robust nominal yield buffer,” said Samir Gadio, head of Africa strategy at Standard Chartered Plc.
Yields on Nigeria’s $1.5 billion Eurobond due in 2034 have declined to 9.69 per cent, the lowest since its early December launch, and a domestic debt auction was three-times oversubscribed during the same period. “We are bullish on the Nigerian reform story. The naira has been stable recently, largely driven by the growing confidence of offshore investors through foreign portfolio investment inflows,” analysts at Citigroup Inc wrote in a client note.
Nigeria’s $2.2b Eurobond, launched in December 2024, the first in nearly three years, had recorded oversubscription of 300 per cent. The last sold Eurobonds were in March 2022. Chairman, Nigerian Exchange Group (NGX Group) Plc, Dr Umaru Kwairanga said Tinubu’s reforms have boosted investors’ confidence in the capital market, expressing optimism that there are significant opportunities ahead.
He urged the president to encourage further reforms that will help to unlock increased prosperity for the Nigerian economy, including legislative adjustments that will make listing more attractive. Kwairanga also called for deepening of pension reforms and amendments to regulations governing free zone companies to facilitate their access to the capital market through listings.
The World Bank, in its latest report on Nigeria, noted that the economic reforms have led to macroeconomic stability, with potential for the Nigerian economy to sustain growth and reduce inflationary pressure going forward. The World Bank, in its Nigeria Development Update (NDU) report titled “Building Momentum for Inclusive Growth”, indicated that Nigeria’s economy recorded its fastest growth in about a decade in 2024, riding on the back of early gains of macroeconomic reforms by the Tinubu administration.
The World Bank report indicated that Nigeria’s Gross Domestic Product (GDP) recorded 4.6 per cent year-on-year growth in fourth quarter 2024, bringing the economic growth for 2024 to 3.4 per cent, the highest since 2014. The country’s fiscal deficit also reduced from 5.4 per cent of GDP in 2023 to 3.0 per cent of GDP in 2024, on the back of significant increase in national revenue, which rose from N16.8 trillion in 2023 to N31.9 trillion in 2024. The World Bank expects Nigeria’s economy to grow 3.6 per cent this year. Sienaert said the Nigerian economy has continued to expand in early 2025 based on high-frequency business indicators.
Repositioning the capital market
Beyond the macroeconomics, the Tinubu administration has also focused on building the institutional capacity of the Nigerian capital market. It started with the reconstitution of the board of Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC). Tinubu combined a blend of technocracy with market experience to set a new tempo for capital market regulation. Dr. Emomotimi Agama, a longstanding staff of SEC, was appointed Director-General.
Tinubu then turned to the institutional framework of the capital market with the recent signing into law of the Investment and Securities Act (ISA) 2025, which repealed the Investments and Securities Act No. 29 of 2007. The new Act promises to reshape the Nigerian capital market in several ways. From investor’s protection to variety of issuable and tradable instruments to integration of the commodities sector to new innovations in derivatives, digital and paperless denominations to domestic enforcement and international cooperation, the ISA 2025 brought the Nigerian market to the most dynamic global level and provided enough headroom for regulatory ingenuity to meet future developments.
There were several notable provisions that made ISA 2025 a landmark legislation, including explicitly recognising virtual and digital assets as well as investment contracts as securities and bringing Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs) and Digital Asset Exchanges under the SEC’s regulatory purview. There is also legal framework for commodities exchanges. Agama described the ISA 2025 as a game-changer with strong potential for stimulating growth for the Nigerian capital market and the economy.
Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Sam Onukwue, said the Act would strengthen regulatory oversight of the capital markets with the overall objective of enhancing investor protection. He said: “We believe it will rekindle the confidence of market stakeholders, which will, in turn, engender significant growth of the market going forward. For operators, it provides diversification opportunities with the expanded scope beyond traditional equities and fixed income”.
Analysts’ consensus
Market pundits agreed that the economic focus of the Tinubu administration has been beneficial to the capital market. They were unanimous that though there were consequential challenges such as the immediate steep rise in prices of goods and services, the outline for the economy remains promising.
Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the past two years have been that aggressive reform of the economy through various policy changes. “If you look critically at where we were coming from as a country, it was clear the economy was on life support and on the brink of collapse before he came in. Policies such as the floating of the naira, removal of fuel and electricity subsidies and efforts at comprehensive tax reforms were read as positively accretive to the finances of the country and the stock market responded positively to those moves also,” Amolegbe, a former President of Chartered Institute of Stockbrokers (CIS), said.
Kurfi said the liberalisation of the forex market by the government was the main driver behind the return of foreign investors to the Nigerian market.
Managing Director, Highcap Securities, Mr David Adonri, said Tinubu has impacted all segments of the capital market positively. “The primary market in these two years is akin to a candle that is burning from both ends. While capital raising through equities has been intensely increasing, debt capital raising by public and corporate Issuers also assumed unprecedented dimensions. If the growth of activities in the primary market has been astonishing, it is difficult to describe the unimaginable dimension to which the secondary market has risen since President Tinubu took office,” Adonri said.
But analysts also agreed that the government had lagged behind in unlocking values in sub-optimal government-owned enterprises and companies. For instance, the floating of the initial public offering (IPO) of the flagship Nigerian National Petroleum Company Limited (NNPCL), which appeared to have reached final stages, had gone cold.
Nothing speaks louder than facts. Tinubu has taken the bulls by the horns, and the bulls are tickled by the excitement of investment-savvy master. With the toughest decisions taken in the early years of his administration, there are reasonable basis to assume that the remaining years will see significant consolidation in tempo and diversity of policies. Sustainability is the key, Tinubu must not take his eyes off the market.
