Foreign portfolio investment (FPI) in Nigeria’s stock market experienced a dramatic 92.39% decline in April 2025, with inflows dropping to N26.64 billion from N349.97 billion in March, according to the Nigerian Exchange (NGX). This sharp fall, reported on May 26, 2025, was driven by the absence of large block trades that had fueled March’s activity and was compounded by global economic uncertainties, including U.S. President Donald Trump’s announcement of a 14% tariff on Nigerian exports. Total foreign transactions fell by 90.99%, from N699.89 billion to N63.07 billion, with outflows of N36.43 billion exceeding inflows, resulting in a net capital outflow of N9.79 billion.
The decline marked a significant reversal from March, when foreign investors accounted for 62.74% of total trades, compared to just 13.08% in April. Overall market activity also contracted, with total transaction value dropping 56.79% to N482.04 billion from N1.115 trillion. Despite this, the market showed resilience year-on-year, growing 39.22% from N346.23 billion in April 2024. Year-to-date (YTD) trades reached N2.714 trillion, a 43.3% increase from N1.894 trillion in 2024, reflecting earlier liquidity improvements.
Domestic investors remained the market’s backbone, contributing N418.97 billion or 86.92% of April’s trades, up slightly from N415.62 billion in March. Institutional investors, including pension funds and asset managers, increased activity by 8.77% to N237.66 billion, while retail investor participation fell 8.02% to N181.31 billion, indicating caution among individuals. YTD, institutional trades totaled N976.66 billion, outpacing retail trades at N860.29 billion.
Foreign investors’ YTD position remains negative, with inflows of N420.32 billion against outflows of N456.80 billion, resulting in a net outflow of N36.48 billion. Domestic investors accounted for 67.68% of YTD market activity, while foreign participation was 32.32%, a shift from 2024’s 13.77% but with uncertain sustainability. Over 18 years, domestic transactions grew 33.15% from N3.556 trillion in 2007 to N4.735 trillion in 2024, while foreign transactions rose 38.31% from N616 billion to N852 billion, highlighting domestic dominance.
Global volatility, driven by U.S. tariffs and naira fluctuations, prompted the Central Bank of Nigeria to inject $200 million into the forex market to stabilize the currency. Nigeria’s economic team also met to address the tariffs’ impact, as Trump introduced a temporary 10% baseline tariff for non-China imports until July 8, 2025. Analysts stress that sustained foreign interest requires deeper reforms to address forex volatility, regulatory inconsistencies, and security concerns, with domestic institutions continuing to anchor the market.
