Breaking:Foreign Portfolio Inflows to Nigerian Stock Market Plunge 92% in April Amid Global Trade Uncertainty

Foreign portfolio investment into Nigeria’s equities market nosedived by 92.39% in April 2025, falling from N349.97 billion in March to just N26.64 billion. This sharp decline was primarily due to the absence of large block trades that had boosted March activity, compounded by growing global economic uncertainty. Total foreign transactions also plunged nearly 91%, highlighting a significant drop in foreign investor appetite amid geopolitical and economic risks.

Market-wide activity mirrored this slowdown, with total transaction value on the Nigerian Exchange (NGX) halving from N1.115 trillion in March to N482.04 billion in April. Despite this monthly drop, the market still showed a year-on-year growth of 39.22% compared to April 2024, underpinned by earlier liquidity improvements. Domestic investors dominated trading, accounting for nearly 87% of April’s activity, with institutional investors increasing their market share while retail participation declined.

Year-to-date figures reveal that foreign investors have recorded a net capital outflow of N36.48 billion between January and April, as inflows of N420.32 billion were outweighed by outflows totaling N456.80 billion. Domestic investors, meanwhile, have been the primary drivers of the market, contributing over two-thirds of total activity so far in 2025. Long-term trends indicate growing domestic market strength, although foreign capital remains important for liquidity spikes.

April’s market turbulence coincided with global volatility triggered by the U.S. announcement of new tariffs, including a 14% levy on Nigerian exports. This trade policy disruption affected Nigeria’s economy and contributed to currency instability. In response, the Central Bank of Nigeria injected $200 million into the foreign exchange market to stabilize the naira, while government officials assessed strategies to mitigate the tariffs’ impact.

Looking ahead, Nigeria faces macroeconomic headwinds including foreign exchange volatility and tightening global financial conditions. Sustained reforms will be necessary to attract and maintain foreign investor confidence. Until then, the Nigerian equities market is expected to rely heavily on domestic institutional investors to provide stability and liquidity amid ongoing external uncertainties.

Source: Nairametric