Foreign portfolio investment into Nigeria’s equities market plummeted by 92.39% in April 2025, dropping to N26.64 billion from N349.97 billion recorded in March. This sharp decline, largely attributed to the absence of major block trades that boosted March figures, reflects rising global uncertainty and waning investor confidence.
According to data from the Nigerian Exchange (NGX), total foreign transactions nosedived by 90.99%, falling from N699.89 billion in March to N63.07 billion in April. Of this, inflows stood at N26.64 billion while outflows totaled N36.43 billion—resulting in a net capital outflow of N9.79 billion.
Foreign participation, which comprised 62.74% of total trade in March, sank to just 13.08% in April. The retreat underscores growing investor caution amid mounting geopolitical risks and an increasingly volatile global financial landscape.
Overall Market Activity Slumps
Total trading activity on the NGX halved in April, falling by 56.79% to N482.04 billion from N1.115 trillion in March. However, on a year-on-year basis, this represents a 39.22% increase over April 2024, when total trade stood at N346.23 billion.
Year-to-date, total transaction value reached N2.714 trillion—a 43.3% rise from N1.894 trillion during the same period in 2024, reflecting stronger early-year liquidity despite the April downturn.
Domestic Investors Sustain Market Momentum
Domestic investors continued to dominate trading, accounting for N418.97 billion or 86.92% of April’s activity, up slightly from N415.62 billion in March. Institutional investors led the charge, increasing their activity by 8.77% to N237.66 billion. In contrast, retail investor participation dipped by 8.02% to N181.31 billion.
Institutional trades have consistently outpaced retail, with April seeing a 14% lead. Cumulatively for 2025, institutional investors have contributed N976.66 billion to market activity, compared to N860.29 billion by retail investors.
Foreign Position Remains in the Red
Despite a surge in March, foreign investor sentiment remains fragile. Between January and April, foreign inflows totaled N420.32 billion, while outflows reached N456.80 billion—resulting in a net outflow of N36.48 billion.
Year-to-date, foreign investors accounted for 32.32% of market activity, a notable increase from 13.77% in 2024, but its sustainability remains uncertain.
Long-Term Trends and Structural Reliance
A review of the past 18 years shows domestic transactions growing from N3.556 trillion in 2007 to N4.735 trillion in 2024, while foreign transactions rose by 38.31% in the same period. So far in 2025, domestic trades stand at N1.837 trillion compared to N877.12 billion in foreign trades—reaffirming domestic investors as the market’s foundation.
Global Headwinds Weigh on Sentiment
The April decline coincides with global market turmoil triggered by U.S. President Donald Trump’s announcement of sweeping tariffs, including a 14% levy on Nigerian exports. This has disrupted global trade, weakened investor sentiment, and added strain on Nigeria’s economy.
In response, the Central Bank of Nigeria (CBN) injected $200 million into the forex market to stabilize the naira. Meanwhile, Nigeria’s economic team met to assess and mitigate the impact of the tariffs.
The new U.S. trade policy, which temporarily imposes a 10% baseline tariff on imports from all countries except China until July 8, underscores the interconnectedness of global trade and its direct impact on emerging markets like Nigeria.
The Road Ahead
With macroeconomic instability, currency volatility, and tightening global financial conditions, Nigeria must push deeper reforms to attract and retain foreign investment. Until then, domestic institutions will continue to anchor the stock market’s stability and growth.
