In a significant show of confidence in Nigeria’s capital market, domestic investors have accounted for a commanding 70.83% of total equity transactions on the Nigerian Exchange Limited (NGX) in the first five months of 2025, amounting to N2.42 trillion out of a total N3.41 trillion in trades. The development reflects growing investor optimism spurred by recent monetary and foreign exchange policy reforms by the Federal Government.
According to the NGX’s latest Domestic and Foreign Portfolio Investment Report, domestic trading activity saw a marked uptick in May, with transactions surging to N581.59 billion — a 38.81% increase from N418.97 billion in April. Foreign investment, while still trailing local activity, also showed improvement, rising by 88.54% to N118.91 billion in May from N63.07 billion in April, buoyed by improved macroeconomic indicators and stabilisation efforts in the FX market.
Within the domestic segment, retail investors continued to lead, accounting for N337.46 billion in trades in May — an 86.12% jump from N181.31 billion in April. Institutional investors contributed N244.13 billion, showing modest growth of 2.72% month-on-month. This trend underlines the increasing role of retail participants in shaping Nigeria’s equities market amid growing digital access and public education.
Year-on-year, equity transactions on the Exchange recorded a dramatic 97.11% increase compared to May 2024’s total of N355.38 billion. Cumulatively, the NGX has seen a 51% growth in equity market transactions between January and May 2025 compared to N2.25 trillion within the same period last year.
In a broader context, domestic participation has witnessed consistent growth over the past 18 years. From N3.56 trillion in 2007, local trading surged to N4.74 trillion by 2024, reflecting a 33.15% increase. Meanwhile, foreign portfolio investments over the same period rose from N616 billion to N852 billion, a 38.31% uptick, although international participation remains sensitive to policy and geopolitical fluctuations.
Analysts attribute the surge in domestic investment to key reforms implemented by the Central Bank of Nigeria (CBN), especially regarding interest rate hikes and exchange rate harmonisation. These measures, introduced to curb inflation and attract foreign capital, have also improved liquidity and investor sentiment domestically.
“The confidence we’re seeing is largely due to increased transparency in the FX market, higher yields on fixed-income instruments, and better clarity in the market direction post-policy announcements,” said a Lagos-based capital markets analyst, Ayo Sulaimon.
Further boosting optimism is the NGX’s increased focus on investor education and digitisation. Online trading platforms, fintech integration, and retail-friendly initiatives have simplified market access and allowed more Nigerians — particularly youths — to participate actively in equities investment.
However, despite the impressive domestic showing, the market still faces challenges, especially in maintaining sustained foreign portfolio inflows. April 2025 witnessed a drastic 91% plunge in foreign trades to N63.07 billion from N699.89 billion in March, underscoring the volatility of international capital flows.
The report showed that foreign inflows in May were valued at N66.11 billion, while outflows reached N52.80 billion, indicating a relatively balanced sentiment among offshore investors. Experts suggest that consistent reforms and macroeconomic stability will be key to rebuilding strong foreign investor interest.
The NGX has vowed to continue working closely with regulators and the private sector to foster a resilient, competitive, and inclusive capital market that drives long-term wealth creation and supports Nigeria’s economic growth ambitions.
As the second half of 2025 unfolds, stakeholders will be watching closely to see whether this upward trajectory in investor confidence and trading activity will be sustained or face resistance from global market headwinds and domestic economic pressures.