Foreign participation in Nigeria’s equities market took a downturn in April 2025, as the value of foreign transactions plummeted by 90.9 per cent to N63.07 billion, compared to N699.89 billion recorded in March.
The significant retreat by foreign investors from the Nigerian Exchange Limited (NGX) may, however, be attributed to macroeconomic uncertainties, especially heightened insecurity as exchange rates moderate.
However, domestic investors maintained a stronghold with transactions totalling N418.9 billion within the same period, representing a modest increase of 0.8 per cent from N415.6 billion in the preceding month.
Domestic activity was buoyed by increased investor confidence, underpinned by relative macroeconomic stability, robust corporate earnings, and sustained institutional participation. This further cemented their dominance in the capital market, as they accounted for 74 per cent more in transaction value than their foreign counterparts.
The latest Domestic and Foreign Portfolio Investment (FPI) report released by the NGX for April attributed this divergence to the absence of large block trades that bolstered inflows in March.
Also, concerns around heightened insecurity, currency volatility and capital repatriation may have impacted negatively on foreigners’ appetite for stocks within the period.
A breakdown of the report showed that domestic investors were responsible for approximately 85 per cent of total market transactions in 2024, leaving foreigners with just 15 per cent of the market share.
This pattern appears to have extended into 2025. As of April 30, domestic transactions had reached N1.8 trillion, while foreign trades totalled N877 billion, reinforcing the growing influence of local players in Nigeria’s capital markets.
Market-wide, the total transaction value on the NGX fell significantly by 56.8 per cent in April, dropping from N1.11 trillion in March to N482.04 billion. Despite the month-on-month decline, activity remained stronger compared to the same period last year.
April’s transaction volume recorded a 39.22 per cent increase over the N346.2 billion posted in April 2024.
Further analysis of the data revealed shifts within the domestic investor participation as institutional investors widened their lead over retail investors as their activity rose by 8.77 per cent, climbing from N218.5 billion to N237.7 billion. However, retail patronage dipped by 8.02 per cent, from N197.1 billion in March to N181.3 billion.
Over a longer horizon, the trend toward domestic dominance is even more pronounced. Between 2007 and 2024, domestic transactions surged by 33.2 per cent, rising from N3.6 trillion to N4.7 trillion. Foreign transactions also grew during this period, though at a slower pace, increasing by 38.3 per cent, from N616 billion to N852 billion.
As global uncertainty and local reforms continue to reshape investment patterns, analysts expect domestic investors to play an increasingly central role in Nigeria’s capital market, especially if foreign capital remains cautious.
