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By Merit Ibe
Nigeria’s stock market has recorded a remarkable turnaround, emerging as the world’s best-performing equity market in 2026 as investors respond to economic reforms and improved corporate earnings.
The Nigerian Exchange (NGX) All-Share Index stood at 245,209 points on August 6, 2026, up from about 74,800 points at the end of 2023, representing a 228 per cent increase in less than three years, according to a report by the Alliance for Economic Research and Ethics, headed by Kelvin Oye.
In dollar terms, the NGX has gained about 67 per cent year-to-date in 2026, putting it ahead of major global markets, including South Korea’s KOSPI and the United States’ S&P 500.
The strong performance has also pushed the total value of companies listed on the exchange to N158.3 trillion, compared with about N30 trillion in 2023.
The report linked the rally largely to changes in the Nigerian economy following the removal of the petrol subsidy and reforms in the foreign exchange market.
Although the reforms initially triggered higher inflation and increased pressure on households, the report said the government’s decision to maintain the policies gradually improved investor confidence.
The banking sector has been a major driver of the rally, following the Central Bank of Nigeria’s recapitalisation programme, which required banks to raise additional capital.
According to the report, the banking index gained 68.05 per cent in 2026, as stronger banks benefited from higher earnings, increased investment and greater capacity to finance businesses.
The oil and gas sector has performed even better, gaining 96.35 per cent year-to-date, helped by higher crude oil prices and improved performance by energy companies.
New listings have also added fresh investment opportunities to the market.
Companies such as Geregu Power, Transcorp Power, Aradel Holdings and BUA Foods have joined the exchange in recent years, increasing the number of large companies available to investors.
Aradel Holdings was among the strongest performers, gaining about 194 per cent in 2026, according to the report.
Foreign investor participation has also increased as confidence in the Nigerian market improves.
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The report said foreign investors accounted for about four per cent of trading in mid-2023, but their share increased to 16 per cent by November 2024, with further growth recorded thereafter.
However, analysts caution that the remarkable performance does not mean the market is without risks.
Some shares and sectors are now trading at very high valuations after the sharp rise in prices. The report noted that some sectors have price-to-earnings ratios above 100 times, raising concerns about whether some stocks have risen faster than their underlying earnings.
Some individual stocks have recorded extraordinary gains. NCR Nigeria, for instance, reportedly gained more than 2,000 per cent in 2026, while Eunisell Interlinked and SCOA Nigeria gained about 704 per cent and 501 per cent respectively.
The market also faces a liquidity challenge. Despite its N158.3 trillion market capitalisation, daily trading remains relatively modest at about N20 billion, meaning large investors may find it difficult to sell substantial holdings quickly without affecting prices.
The report said the pace of growth recorded since 2023 is unlikely to continue indefinitely because some of the factors that triggered the rally were one-off developments.
These include the removal of the petrol subsidy, foreign exchange reforms, bank recapitalisation and major company listings.
However, continued improvement in inflation, exchange-rate stability, fiscal management, non-oil exports and corporate earnings could support further growth.
The report said future annual returns could moderate to between 15 and 25 per cent if the reforms remain on track, which would still represent strong performance compared with many developed markets.
It warned that policy reversal, falling oil prices, global economic shocks and renewed pressure on the naira could trigger a market correction.
Despite these risks, the dramatic rise of the NGX represents a major shift in investor sentiment towards Nigeria.
From a market capitalisation of about N30 trillion in 2023 to N158.3 trillion in 2026, and from 74,800 index points to more than 245,000, the Nigerian equities market has recorded one of its strongest periods of growth.
The challenge now is whether Nigeria can turn the market rally into a sustained investment story by maintaining economic reforms, improving the business environment, attracting long-term foreign capital and deepening trading activity across the market.
