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By Chinwendu Obienyi
Foreign investors maintained a steady presence in Nigeria’s stock market in 2025, with transactions on the Nigerian Exchange (NGX) hitting N1.453 trillion in the first eight months of the year.
The latest trading figures released by the NGX showed that foreign participation accounted for more than one-fifth of total activity during the period, highlighting a cautiously optimistic return of offshore funds despite ongoing macroeconomic pressures.
Analyzing the NGX domestic and foreign portfolio investment report, overall transactions on the local bourse between January and August stood at N6.92 trillion, with domestic investors dominating the market at N5.46 trillion.
This meant that foreign portfolio investments (FPI) represented 21 per cent of market turnover, while domestic investors have been responsible for the remaining 79 per cent.
Market watchers note that although the foreign inflow is still below pre-pandemic levels, the cumulative figure reflects improving investor confidence, aided by ongoing reforms in Nigeria’s foreign exchange market and efforts to restore macroeconomic stability.
Foreign participation in the equities market had been on the decline in recent years, with many offshore investors citing currency illiquidity, repatriation challenges, and policy uncertainties as reasons for staying away.
However, the Central Bank of Nigeria’s (CBN) made moves to unify exchange rates, clear outstanding forex backlogs, and improve liquidity have, however, started to ease some of those concerns.
“Foreign investors are gradually testing the waters again.The reforms are not perfect, but there is a sense that the worst of the forex crisis is behind us. That is partly why we are seeing more activity from offshore funds, particularly in blue-chip stocks with strong fundamentals”, operators at the exchange said.
The NGX figures also revealed fluctuations in monthly turnover, with July and August recording slower activity compared to earlier months in the year. In August alone, total transactions on the nation’s bourse fell sharply to N908.4 billion, marking a 49.95 per cent decline from N1.815 trillion recorded in July.
Both foreign and domestic investors reduced their exposure, underscoring persistent caution amid global and local uncertainties.
A further analysis of the total transactions executed between the current and prior month revealed that total domestic transactions decreased significantly by 55.87 per cent from N1.6691 trillion in July 2025 to N736.57 billion in August 2025.
This sharp decline was primarily due to the absence of the block trades that had substantially boosted domestic transaction figures in July 2025. However, total foreign transactions increased by 17.72 per cent from N145.95 billion (about $95.17 million) to N171.81 billion (about $112.18 million) between July 2025 and August 2025.
Despite these headwinds, domestic investors, particularly institutional players such as pension funds and asset managers, continued to underpin market liquidity. Their dominance remains a key feature of the NGX, as retail investors and offshore participants often react quickly to macroeconomic shifts.
Specifically, institutional investors outperformed retail Investors by 6 per cent. A comparison of domestic transactions in the current and prior month (July 2025) revealed that retail transactions decreased by 33.46 per cent from N516.50 billion in July 2025 to N343.67 billion in August 2025. Also, the institutional composition of the domestic market decreased significantly by 65.91 per cent from N1.1526 trillion in July 2025 to N392.90 billion in August 2025.
Looking ahead, analysts believe sustained reforms, improved forex stability, and stronger corporate earnings could help deepen foreign participation in the market.
“If Nigeria can maintain policy consistency and macro stability, the equities market could attract more foreign inflows, especially with valuations still relatively cheap compared to frontier and emerging market peers,” an economist who did not want his name in print said.
For now, the N1.45 trillion foreign turnover signals cautious optimism. Whether this trend solidifies will depend largely on Nigeria’s ability to sustain reforms and reassure foreign investors of a predictable investment climate.
