Local investors, particularly institutional players, have solidified their dominance in Nigeria’s equity market, driving N7.15 trillion of the N9 trillion in total transactions recorded on the Nigerian Exchange Limited (NGX) from January 2024 to May 2025, according to NGX data. Domestic investors accounted for approximately 80% of trading activity, with foreign investors contributing N1.85 trillion, reflecting renewed confidence fueled by pension fund investments and macroeconomic reforms.
Domestic Investors Lead Market Surge
NGX’s Domestic & Foreign Portfolio Investment Reports reveal that domestic transactions totaled N4.735 trillion in 2024, while foreign transactions reached N852.03 billion. In the first five months of 2025, domestic trades amounted to N2.418 trillion, with foreign transactions at N996.03 billion, bringing the 17-month total to N9 trillion. This marks a 32% year-on-year increase from N3.58 trillion in 2023 to N5.59 trillion in 2024, driven largely by domestic institutional investors.
In December 2024, trading activity soared to N673.66 billion, a 52.29% jump from N442.34 billion in November 2024. Domestic investors accounted for N606.91 billion (90.09%), with institutional investors leading at N406.04 billion, a 97.09% increase from N206.02 billion the previous month. Retail investor trades grew modestly by 2.81% to N200.87 billion. Foreign transactions in December totaled N66.75 billion, up 63.04% from N40.94 billion in November, with inflows of N26.26 billion and outflows of N40.49 billion.
In May 2025, total transactions hit N700.50 billion, a 45.32% rise from N482.04 billion in April and a 97.11% increase from N355.38 billion in May 2024. Domestic investors contributed N581.59 billion (83.02%), with retail investors outperforming institutions, recording N337.46 billion (up 86.12% from April) compared to institutional trades of N244.13 billion (up 2.72%). Foreign transactions rose to N118.91 billion, an 88.54% increase from April, with inflows of N66.11 billion and outflows of N52.80 billion, indicating a slight positive net inflow.
Year-to-Date Performance
From January to May 2025, NGX transactions totaled N3.41 trillion, up from N2.25 trillion in the same period of 2024. Domestic investors drove N2.418 trillion, while foreign investors contributed N996.03 billion, reflecting growing foreign interest in Nigerian equities. Over an 18-year period (2007–2024), domestic transactions grew by 33.15% from N3.556 trillion to N4.735 trillion, and foreign transactions increased by 38.31% from N616 billion to N852 billion.
Factors Driving Market Resilience
David Adonri, CEO of Highcap Securities Limited, attributed the market’s strength to reforms implemented after the 2007–2008 global financial crisis, which shifted dominance from retail to institutional investors. “Post-2007 reforms made the market more resilient, with institutional investors like pension funds and asset managers acting rationally, unlike the retail-driven market of the past,” Adonri told The PUNCH. He highlighted the role of pension funds in sustaining market liquidity, noting, “Increased domestic savings through pension funds have significantly bolstered market stability.”
Adonri also credited macroeconomic reforms under President Bola Tinubu’s administration for restoring foreign investor confidence. “Previous capital control policies trapped foreign dividends, eroding trust. The current administration’s reforms, including settling outstanding remittances, have reversed this trend,” he said. He further noted that global uncertainties, such as trade tensions initiated by former U.S. President Donald Trump, have made Nigeria an attractive investment destination.
Foreign Investor Outlook
Foreign investor participation peaked in March 2025, with inflows and outflows nearly balanced at N349.97 billion and N349.92 billion, respectively, accounting for 62.74% of market activity. Adonri expressed optimism about continued foreign portfolio investment (FPI), citing Nigeria’s improving exchange rate stability, unrestricted capital flows, and profitability. “These conditions are now met, driving an upsurge in FPI that will soon reflect in market statistics,” he said.
Market Momentum Amid Challenges
The NGX’s robust performance underscores the resilience of Nigeria’s capital market despite macroeconomic headwinds. Analysts emphasize that domestic institutional investors, particularly pension funds and insurance firms, have been pivotal in sustaining activity. The gradual return of foreign investors, spurred by policy reforms and global capital shifts, further strengthens the market’s outlook. As Nigeria continues to navigate economic challenges, the NGX’s growth signals a promising trajectory for the country’s financial landscape.
