Nigeria’s capital market experienced remarkable growth during President Bola Tinubu’s first two years in office, fueled by significant policy reforms. The administration’s decision to float the naira, remove fuel subsidies, and recapitalize the banking sector significantly boosted both the primary and secondary market segments. The primary market, where companies raise capital, witnessed heightened activity comparable to pre-2008 levels. The bank recapitalization exercise drove a surge in equity and debt issuances, revitalizing this segment. The secondary market, where investors trade securities, experienced phenomenal growth, with the All-Share Index (ASI) soaring past the historic 100,000 mark, a remarkable feat considering it closed at 51,251.06 in 2022. This surge was driven by renewed investor confidence, particularly from foreign investors, who returned to the market following the release of trapped funds and the deregulation of the foreign exchange market.
The surge in foreign portfolio participation played a crucial role in this market resurgence. From a share of 9.93% of total equity trading value in 2023, foreign participation climbed to 32.32% by April 2025. This influx of foreign capital reflects growing confidence in Nigeria’s economic reforms and improved macroeconomic outlook. Foreign portfolio inflows increased significantly from N122.55 billion in 2023 to N420.32 billion in the first four months of 2025. While foreign outflows also saw a rise, reaching N456.80 billion in the same period, this indicates active trading rather than a withdrawal, reflecting investors balancing gains with risk management in a dynamic economic environment. March 2025 proved a pivotal month, with foreign investors accounting for 62.74% of the N1.12 trillion total transactions, highlighting a dramatic shift from net selling in 2023 to substantial buying, driven by optimism regarding currency stability and corporate earnings prospects.
While foreign participation surged, domestic investors, primarily institutional players, maintained a significant presence in the market, albeit with a reduced share. Domestic institutional investors contributed N860.29 billion in trading value by April 2025, reflecting their continued engagement. Retail investors also played a steady role, accounting for N935.78 billion in trading value in 2023. The combined activity of both domestic and foreign investors fueled a surge in total equity market transactions, reaching nearly N2.71 trillion in the first four months of 2025, a significant increase from N2.93 trillion in 2023, underscoring heightened market liquidity and investor engagement.
Analysts attribute this market revitalization to President Tinubu’s economic policies. Experts highlighted the floating of the naira, the removal of fuel subsidies, and the push for bank recapitalization as key drivers of market momentum. These reforms signaled a shift towards market-driven policies, attracting both domestic and international investors. While the market experienced fluctuations, characterized by profit-taking and adjustments to the new policy landscape, these shifts were interpreted as normal market oscillations rather than indicators of instability. The sustained year-on-year growth of the ASI and robust sectoral performance across banking, oil and gas, industrial goods, and consumer goods further reinforced the overall positive trajectory of the market.
Despite the market’s positive performance, challenges remain. High inflation and reduced purchasing power have impacted retail investor participation, dampening their ability to actively engage in the market. Furthermore, while the reforms have generated optimism, the associated hardships experienced by ordinary Nigerians need to be addressed. The rising cost of living, coupled with challenges in sectors like electricity supply and security, requires urgent attention to ensure that the benefits of economic growth are more broadly distributed.
Moving forward, sustaining this market momentum will require a multi-pronged approach. Addressing inflationary pressures through effective fiscal and administrative measures is crucial to restoring purchasing power and bolstering retail investor participation. Accelerating the privatization of non-performing public assets and focusing on reducing operational costs for businesses can further stimulate economic activity and create employment opportunities. Finally, tackling critical issues such as electricity supply and security will be essential to unlocking broader economic growth and ensuring that the benefits of the capital market’s success are shared more equitably across the Nigerian population.
