Renewed Investors’ Confidence Raises Nigerian Market Capitalisation to N138.8tn in First Eight Months of 2025

Kayode Tokede

Nigeria’s capital market has been riding the wave of renewed investors’ confidence in the Nigerian economy in 2025, with overall market capitalisation on the Nigerian Exchange Limited (NGX) surging to N138.8 trillion at the end of August, an impressive leap from N109.27 trillion in December 2024, report by NGX.

The growth, amounting to N29.5 trillion in just eight months, was a reflection of the combined performance of equities, debts, and Exchange Traded Funds (ETFs).
The rally is being driven by sweeping macroeconomic reforms.
The Central Bank of Nigeria’s (CBN) foreign exchange liberalisation, the federal government’s removal of fuel subsidy, banking sector recapitalisation, and robust corporate earnings have all combined to rekindle both local and foreign investors’ appetite.

Analysts have noted that for the first time in years, exchange rate stability has eliminated the huge FX losses that plagued listed firms, significantly boosting market sentiment.
Data from the NGX shows that equities remain the dominant contributor to market capitalisation, accounting for N88.57 trillion or 63.8 per cent of the total.

Debt instruments, including corporate bonds and government securities, made up N50.21 trillion (36.2 per cent), while ETFs contributed a modest N31.65 billion, representing 0.02 per cent.
The equities market alone gained N25.8 trillion during the period under review, rising from N62.77 trillion at the close of 2024 to N88.57 trillion by August 2025.

Debt securities also grew by N3.74 trillion in eight months, while ETFs added N2.46 billion.
Afrinvest (West Africa) forecasts that capital importation could reach $19.3 billion by year-end, a 56 per cent jump from 2024 levels.
This projection builds on the National Bureau of Statistics’ first-quarter report showing $5.64 billion inflows—the highest in five years.

Analysts attributed the upbeat outlook to favourable domestic interest rates, stable currency, global investment rebalancing, and the potential for a rate cut by the United States.
However, they cautioned that the quality of inflows, not just the volume, would determine the sustainability of growth.

The Debt Management Office (DMO) has been active in the capital market, listing new borrowings to finance the 2025 budget.
Consequently, corporate and government entities together raised nearly N5 trillion within the eight months under review, underscoring the market’s central role in funding economic and infrastructure projects.

Within the debt space, the federal government’s securities dominated, climbing from N44.93 trillion in December 2024 to N48.96 trillion in August 2025.
State and local government debts, however, slipped from N348.99 billion to N298.77 billion, while corporate bonds and debentures declined to N952.15 billion from N1.19 trillion.

The Group Managing Director of NGX Group, Temi Popoola, credited structural reforms, regulatory clarity, and deeper collaboration with the Securities and Exchange Commission (SEC) for creating an enabling environment.
The Exchange, he added, is investing heavily in digital platforms such as NGX Invest and forging partnerships with global exchanges, including in Ethiopia and Asia, to expand its reach and integrate Nigeria’s market with international flows.

“This growth is deliberate. It is the product of reforms, stronger investor protections, and the confidence that Nigeria’s capital market is becoming future-ready,” Popoola said.
Market watchers point to the resurgence of big-name stocks as key drivers of the rally. Blue chips such as Airtel Africa, Nestlé Nigeria, Nigerian Breweries, Cadbury Nigeria, and MTN Nigeria have all enjoyed renewed interest.

The Vice President of Highcap Securities, David Adonri, noted that the rally could ease in the short term before being reshaped by half-year earnings reports, which will inject price-sensitive information into the market.

Another critical factor is the elimination of foreign exchange-related losses. In 2023 and 2024, listed firms posted combined pre-tax FX losses of N867 billion.

In contrast, stability in the exchange rate regime has ensured zero FX losses in 2025, according to APT Securities. This, analysts say, has been a major confidence booster.

The Nigerian Insurance Industry Reform Act (NIIRA 2025) has also spurred activity, particularly in insurance stocks, while the CBN’s recapitalisation programme has revived the primary market, which attracted more than N2 trillion in 2024 and is expected to post similar volumes this year.

Despite lingering volatility and economic headwinds, the outlook remains cautiously optimistic. Aruna Kebira, Managing Director of Globalview Capital Limited, told THISDAY that resilience in the stock market has been remarkable.

He highlighted banking sector momentum, corporate earnings, early-year inflation moderation, and stronger investors’ confidence as the major drivers of performance.