Foreign investors are taking a more cautious approach to Nigeria’s equities market as political uncertainty, high interest rates and currency concerns weigh on investment decisions. New trading data show that foreign investors accounted for just 10.79 per cent of transactions on the Nigerian Exchange (NGX) between January and July 2026, leaving domestic investors responsible for nearly 90 per cent of market activity.
Total transactions on the NGX climbed to N11.98 trillion during the first seven months of the year, almost double the N6.01 trillion recorded during the same period in 2025. However, most of that growth came from Nigerian investors, with domestic transactions reaching about N10.6 trillion, compared with approximately N1.29 trillion from foreign investors.
Foreign investors also recorded a net outflow of N266.07 billion, as inflows stood at N513.3 billion while outflows rose to N779.4 billion. The figure represents a significant increase from the N61.8 billion net foreign outflow recorded during the corresponding period last year, highlighting growing caution among international portfolio investors.
Analysts attributed the trend partly to political uncertainty as Nigeria moves closer to the 2027 election cycle. Investors are becoming more watchful of possible changes in government policies and the broader economic direction. At the same time, attractive yields in the fixed-income market are giving investors another reason to move money away from equities. OMO bills are yielding around 21 to 22 per cent, while Treasury bills offer about 18 to 22 per cent and bonds yield roughly 16 to 17 per cent.
Despite the decline in foreign participation, Nigeria’s equities market has continued to perform strongly, with the NGX All-Share Index gaining more than 56 per cent in 2026. Domestic institutional and retail investors have increasingly stepped in to drive market activity. However, analysts warn that political developments, inflation, interest rates and movements in the naira will remain key factors determining whether foreign investors return in stronger numbers or continue to favour Nigeria’s relatively high-yielding fixed-income market.
source: The guardian
