Foreign portfolio investment into Nigeria’s equities market fell sharply by 92.39% in April 2025, as inflows dropped to N26.64 billion, compared to N349.97 billion recorded in March.

The significant decline, driven largely by the absence of block trades that boosted March activity, comes amid continued global uncertainty and growing caution among international investors.

According to data from the Nigerian Exchange (NGX), total foreign transactions also plummeted by 90.99%, from N699.89 billion in March to N63.07 billion in April.

Inflows accounted for just N26.64 billion, while outflows stood at N36.43 billion, resulting in a net capital outflow of N9.79 billion for the month.

The decline in April represents a sharp reversal from the strong foreign interest recorded in March, when foreign transactions made up 62.74% of total trade. In April, foreign participation plunged to just 13.08%, reflecting a weakened appetite for Nigerian equities as investors navigate risks linked to geopolitical headwinds.

Total market activity halved

• Total transaction value on the NGX dropped by 56.79%, from N1.115 trillion in March to N482.04 billion in April. However, compared to April 2024, when the total was N346.23 billion, the market grew by 39.22% year-on-year.
• Year-to-date (YTD), the total value of trades stood at N2.714 trillion, a 43.3% increase from N1.894 trillion recorded in the same period in 2024. The spike reflects improved liquidity conditions earlier in the year, although the recent drop in April highlights persisting vulnerabilities.
• Domestic investors once again dominated the market, accounting for N418.97 billion or 86.92% of total trade in April. This marks a slight increase of 0.81% from N415.62 billion in March.
• Within the domestic segment, institutional activity rose by 8.77%, from N218.50 billion in March to N237.66 billion in April, signaling increasing participation from pension funds, asset managers, and corporates. In contrast, retail investor activity dropped by 8.02%, from N197.12 billion to N181.31 billion, indicating a more cautious stance among individual investors.
• Institutional investors outperformed retail by 14% in April, continuing a broader trend observed throughout the year. As of April 2025, institutional trades have reached N976.66 billion, while retail trades total N860.29 billion.

YTD foreign position is still negative

• Despite the surge in foreign trade in March, the year-to-date balance remains negative. Foreign inflows between January and April stood at N420.32 billion, while outflows reached N456.80 billion. This leaves a net outflow of N36.48 billion, highlighting the continued caution among foreign players.
• Overall, domestic investors accounted for 67.68% of total market activity YTD, with foreign investors contributing 32.32%. This is a notable shift from 2024, when foreign trades made up just 13.77% of the market, but the sustainability of this trend remains in question.
• A review of trading over the last 18 years shows that domestic transactions have grown from N3.556 trillion in 2007 to N4.735 trillion in 2024, an increase of 33.15%. Foreign transactions rose by 38.31% during the same period, from N616 billion to N852 billion.
• In 2025 so far, domestic trades stand at N1.837 trillion, compared to N877.12 billion in foreign trades, reflecting consistent domestic dominance despite periodic foreign spikes. The long-term trend suggests that while foreign capital can boost market liquidity, the Nigerian equity market continues to rely heavily on domestic institutional support.

What you should know

In April 2025, global markets experienced heightened volatility following U.S. President Donald Trump’s announcement of sweeping tariffs, including a 14% levy on Nigerian exports.

This move disrupted trade flows and led to significant economic uncertainty worldwide.

For Nigeria, the tariffs posed challenges to its export economy, particularly affecting sectors beyond oil.

• The Central Bank of Nigeria (CBN) responded by injecting $200 million into the forex market to stabilize the naira, which had experienced fluctuations due to the global economic tensions.
• Also, Nigeria’s economic team convened to assess the potential impacts of the tariffs and to strategize on mitigating adverse effects.
• Trump suspended country-specific reciprocal tariffs for all nations except China, implementing a uniform 10% baseline tariff on imports from these countries until July 8, 2025. The temporary measure aims to facilitate negotiations with over 75 countries seeking to resolve trade imbalances and avoid escalating trade tensions. However, these developments affirm the interconnectedness of global trade policies and their direct implications on national economies like Nigeria’s.

With macroeconomic headwinds, FX rate instability, and tightening global financial conditions, Nigeria needs to maintain deeper reforms for sustainable foreign interest. Until then, domestic institutions will remain the backbone of the equities market.