Nigeria stock market leads Africa in dollar returns, surging 34.39% YTD amid strong equity gains and currency stability

Nigeria’s stock market has emerged as one of Africa’s top performers in U.S. dollar terms this year, outpacing several continental peers despite a challenging domestic economic environment.

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According to a weekly newsletter report by African Markets, the Nigerian Exchange Limited (NGX) has delivered a year-to-date return of 34.39 per cent in dollar terms, reflecting robust equity price appreciation and improved currency stability that have bolstered investor confidence.

In local currency terms, the market has risen 25.30 per cent YTD, driven by sustained buying interest in banking, consumer goods, and industrial stocks.

The NGX recorded one of its strongest weekly performances in recent history, with investors gaining approximately N8.14 trillion during the week ending 21 February.

The stronger performance in dollar terms underscores the influence of exchange rate dynamics and renewed foreign portfolio inflows. While Tanzania leads Africa in local currency gains with a 40.65 per cent increase, Nigeria surpasses it when measured in U.S. dollars.

Conversely, Zimbabwe’s equity gains have been tempered by currency pressures, highlighting the decisive role of exchange rates in shaping cross-border investment.

Analysts attribute Nigeria’s market resilience to improving macroeconomic indicators, including tighter monetary policies aimed at stabilising inflation and supporting confidence in the foreign exchange market.

Despite ongoing economic reforms and elevated inflationary pressures, investors are positioning to benefit from anticipated medium-term recovery gains.

Market operators noted that Nigeria’s strong dollar-denominated returns are particularly notable in a global environment marked by higher-for-longer interest rates in advanced economies.

Emerging and frontier markets, they added, must offer compelling risk-adjusted returns to attract capital, a challenge that Nigeria’s current performance appears to meet.

Meanwhile, NGX Regulation Limited (NGX RegCo), the independent regulatory arm of the Nigerian Exchange Group, issued an advisory to the public following notable price movements in certain listed companies.

The advisory encourages investors to base decisions on publicly available information, exercise due diligence, and consult licensed intermediaries when necessary.

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Olufemi Shobanjo, CEO of NGX Regulation Limited, emphasised: “Our primary responsibility is to maintain a level playing field where market participants can trade with confidence, backed by timely and accurate information.”