Foreign Investors Sell ₦576 Billion Worth of Nigerian Stocks in Six Months Citing Economic Uncertainties
The Nigerian capital market has suffered a significant blow in the first half of 2025, as foreign portfolio investors sold off ₦576.09 billion worth of equities between January and June.
This marks an alarming 84.97% increase in capital flight compared to the ₦311.41 billion offloaded by foreign investors during the same period in 2024, underscoring mounting concerns over Nigeria’s macroeconomic direction, foreign exchange challenges, and global investment shifts.
The latest data from the Nigerian Exchange Limited (NGX) reveal that while foreign inflows into the stock market during the same period stood at ₦559.25 billion, the balance of trade resulted in a net outflow of ₦16.84 billion.
This suggests that despite an increase in trading activity by foreign participants, more capital exited the market than was brought in.
The NGX report also highlighted that total foreign transactions—comprising both purchases and sales—reached ₦1.14 trillion in the first half of 2025, more than double the ₦540.48 billion recorded in the corresponding period of the previous year.
Analysts interpret this spike in activity as a reflection of speculative trading and fast-paced repositioning by investors wary of Nigeria’s volatile fiscal and monetary landscape.
Industry watchers attribute the massive foreign exit partly to global trends, including higher yields in U.S. treasury bills and tightening monetary policies in developed markets, which have made frontier markets like Nigeria less attractive.
However, local issues such as continued uncertainty in Nigeria’s forex market, inflationary pressures, policy inconsistency, and difficulties around capital repatriation have further heightened investor concerns.
Despite the steep sell-offs, domestic investors have shown resilience and even surged ahead in their level of participation.
According to the NGX, domestic investors accounted for ₦3.06 trillion in total trades in H1 2025, representing a 41.5% increase from the previous year. Out of this, institutional investors contributed ₦1.59 trillion, while retail investors accounted for ₦1.47 trillion.
Overall, trading volume on the Nigerian Exchange grew significantly in the six-month period, with total transactions rising by 60.98% to hit ₦4.19 trillion, up from ₦2.60 trillion in H1 2024.
This performance was largely driven by heightened domestic activity, indicating that Nigerian investors are increasingly stepping up to fill the vacuum left by departing foreign participants.
While the growing strength of domestic investors has helped prevent a deeper slump in the market, financial analysts warn that sustained foreign capital outflows could gradually erode liquidity and limit access to external financing for listed companies.
They stress the need for deliberate economic reforms to stabilize the exchange rate, improve ease of doing business, and restore investor confidence.
As Nigeria navigates a delicate recovery path, the capital market remains a barometer of broader economic sentiment. The exodus of foreign investors is a clear signal that more must be done to create a stable and predictable investment climate—one where both local and foreign stakeholders can operate with clarity and confidence.
