The removal of fuel subsidies and mounting global pressure on fossil fuel investments are fast reshaping Nigeria’s capital market, triggering a strategic shift in investor focus away from oil and gas, the long-time anchor of the Nigerian Exchange Limited (NGX), towards high-growth sectors like technology and agriculture, as the sector recorded a negative 12.2 per cent loss year-to-date (YTD).
As domestic reforms increase operational risks for petroleum-linked firms and global sentiment leans toward sustainability and innovation, investors are rebalancing portfolios in search of stronger long-term value.
This structural reconfiguration is redefining capital flows, market performance, and sector leadership on the exchange. The oil and gas stocks, which were the toast of the NGX, accounting for as much as 25 per cent to 30 per cent of total market capitalisation for over a decade, have receded, recording a negative 12.19 per cent YTD return and rated the worst performing on the NGX YTD.
The all-share index, which measures the performance of listed equities and four other major indices – banking index, consumer goods index, industrial index and insurance index, has so far outperformed the sector.
As at the close of trading on September 1, 2025, the consumer goods index dominated, returning 84.2 per cent gain to shareholders. The insurance sector trailed with 78.8 per cent. The banking index returned a 40.9 per cent gain to investors. The industrial index appreciated by 39.3 per cent. The all-share index also gained 36.3 per cent.
Recall that between 2020 and 2023, the NGX oil and gas Index soared by as much as 752 per cent, outperforming the broader market. In 2024 alone, the sector posted gains of between 160 per cent and 170 percent. However, by H1 2025, that same index had slumped by over 10 per cent, reflecting weakening investor sentiment amid mounting operational and macroeconomic pressures, while the broader market climbed 16.57 per cent, buoyed by gains in mid-cap, tech, and agribusiness counters.
The growing list of voluntary delistings by oil majors, including MRS Oil earlier this year, further illustrates the sector’s waning grip on the NGX.
Data from the exchange showed that in the first half of 2025, investment in NGX listed agritech stocks surged by 90 per cent, marking a fresh twist in investor behaviour. This landmark development signals rising confidence in agriculture’s long-term potential amid broader economic diversification.
An independent investor, Amaechi Egbo, said the watershed moment came in mid-2023, when the Nigerian government implemented a bold fuel subsidy reform, effectively eliminating decades of state-backed petrol price control.
According to him, while the move was lauded for its fiscal prudence, it significantly raised operating costs for downstream oil and gas firms. He pointed out that companies in the sector, previously cushioned by government subvention and stable demand, suddenly faced thinner margins and heightened volatility.
“The reform dampened near-term profitability expectations and shook investor confidence in what was once seen as a safe and dependable sector.
“Compounding the domestic pressures were global energy transition trends. International investors and multilateral institutions began tightening capital flows to fossil fuel-linked projects in favour of renewable energy, climate-smart technologies, and sustainability-themed portfolios.”
Egbo pointed out that even local fund managers began re-evaluating their long-term exposure to hydrocarbons while several multinational oil majors also started divesting from Nigerian assets, citing rising operational risks and a shift toward cleaner energy sources.
He said these developments added a layer of uncertainty to oil and gas equities, which had once dominated market capitalisation and delivered robust dividend yields.
He pointed out that the agriculture and technology sectors began to emerge as viable alternatives for capital deployment, noting that government incentives for agro-industrial development, rising food inflation, and the urgent need to strengthen local food production made agriculture increasingly attractive.
A summary of the stock performance for the listed oil, gas, agriculture, and tech companies as of Monday, September 1, 2025, showed that the oil and gas sector saw a significant downturn in investor sentiment year-to-date (YTD).
Conoil, with a market capitalisation of N146 billion, began the year at N387.20 per share but declined by 45.5 per cent, closing at N211.10 kobo on Monday.
Shareholders’ worries are compounded by the fact that Conoil has lost 10 of the stock’s value from August 4th to date. Aradel closed its trading on Monday at N513.50 kobo, recording a 0.7 per cent gain over its previous closing price of N510. However, Aradel began the year with a share price of N598 but has since lost 14.1 per cent of that price valuation.
Seplat Plc also dropped 5.63 per cent YTD, from N5,700 to N5,379.30 kobo, despite a large market cap of N3.23 trillion.
For agriculture, Presco Plc rallied by 212 per cent, rising from N475 to N1,480, reaching a market cap of N1.48 trillion. Okomu Oil Palm gained N130 per cent, moving from N444.00 to N1,020, reflecting renewed investor confidence.
The best performer, Ellah Lakes Plc, skyrocketed from N3.16 to N11.43 kobo, recording a 302 per cent gain and achieving a market capitalisation of N49 billion.
Tech stocks also posted remarkable returns. MTN Nigeria has doubled, gaining 118 per cent YTD from N200 to N435, with a massive market capitalisation of N9.13 trillion. Computer Warehouse Group (CWG) surged by 108 per cent, rising from N7.70 to N16.05 kobo. Its current market capitalisation stands at N40.5 billion.
