Nigeria’s stock market delivered a record performance in 2025, shrugging off economic headwinds to post its largest-ever annual increase in market value, buoyed by strong corporate earnings, dividend payouts and improved clarity in the foreign exchange market.
Data from the Nigerian Exchange (NGX) showed total market capitalisation rose by the equivalent of US$25.3 billion during the year to US$68.6 billion by the end of December. The benchmark NGX All-Share Index surged 51.2 percent, extending gains from 2024, when it rose nearly 38 percent.
The rally came despite a difficult macroeconomic environment marked by high inflation, tight monetary policy and currency instability in the first half of the year. The naira later stabilised following policy adjustments, helping restore investor confidence.
After a cautious start to the year, investors who had initially favoured high-yield fixed-income assets gradually returned to equities as corporate results improved and yields on government securities softened. Analysts said renewed confidence was also driven by clearer foreign exchange policies and share buybacks by companies seeking to take advantage of undervalued stocks.
Domestic investors continued to dominate activity on the exchange, accounting for more than 83 percent of total transactions, according to NGX data. Foreign participation rebounded after years of weak sentiment, though it remained below historical highs.
International portfolio inflows jumped 182 percent to about US$760 million, while outflows increased to roughly US$630 million. The market recorded a net foreign inflow of around US$140 million, its first annual net positive balance in three years, signalling a tentative return of overseas investors.
Several major corporate transactions shaped market activity during the year. They included TotalEnergies’ sale of its stake in the Bonga offshore oil field to Shell, UACN’s acquisition of consumer goods maker CHI Limited, and the listing of Legend Plc. The year also saw the ongoing buyout of Guinness Nigeria by the Tolaram Group, alongside a number of company delistings as firms restructured or exited the public market.
NGX Group chairman Umaru Kwairanga said the strong performance reflected the combined impact of economic reforms and strategic corporate decisions.
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“The market’s resilience demonstrates growing confidence in the reform agenda and the ability of listed companies to adapt to a challenging environment,” he said in a statement.
NGX chief executive Temi Popoola highlighted improvements in market infrastructure, including technological upgrades and enhanced transparency, as key factors supporting liquidity and investor participation.
Analysts cautioned, however, that sustaining the momentum into 2026 will depend on broader economic conditions. Inflation remains elevated, while tight monetary policy continues to weigh on consumption and borrowing costs, posing risks to corporate profitability.
“The key test will be whether earnings growth can be sustained if inflationary pressures persist and macroeconomic vulnerabilities remain,” said a Lagos-based investment analyst.
For now, investors appear to be betting that reforms will continue and that macroeconomic stability will improve gradually. Policy signals from Abuja, including commitments to market-oriented reforms and fiscal discipline, have helped underpin optimism as Africa’s largest economy enters 2026.
