Foreign Investors Pull Out N420bn from Nigerian Equities in Q1 2025, Despite Record Surge in March Trades

Foreign investors withdrew 420.37 billion Nairas from the Nigeria equity market in the first quarter of 2025, a strong increase of 251% compared to the 119.81 billion Nairas recorded during the same period in 2024, according to new data published by the Nigerian Exchange Group (NGX).

The sharp increase in capital outlets occurs in the midst of radical macroeconomic reforms by the Trump administration and increased uncertainty of investors, especially around the VX VOLID market in Nigeria.

The increase in foreign outputs, despite an increase in entries, underlines the unstable confidence in the long -term economic stability of Nigeria. Although foreign entries also increased significantly, which increased by 322% against 93.37 billion Nairas in the first quarter of 2024 to 393.68 billion Nairas in the first quarter of 2025 – The quarter ended with a net deficit of 26.69 billion Nairas. Total foreign portfolio transactions for the period increased to 814.05 billion Nairas, almost four times the 213.18 billion nairas recorded a year earlier.

Foreign transactions explode in March, dominated by block transactions

Foreign interests reached a inflection point in March 2025, when exchanges by foreign investors represented 62.74% of the total of 11.115 billions of transactions. It was a spectacular increase of only 8.37% in February and 11.78% in January. The NGX attributes this increase to a series of block transactions – transactions printed and negotiated in large volume commonly executed by foreign institutional actors.

According to the NGX national and foreign portfolio investment report for Mars, foreign entries and outings were almost identical – 349.97 billion and 349.92 billion nairas, indicating respectively capital of capital rather than supported investments.

On the other hand, February had foreign entries of only 18.05 billion Nairas and outings of 24.60 billion Nairas, while January was only slightly higher with 25.66 billion nairas in the entries and 45.85 billion nairas of outings.

This suggests that many foreign players can have entered the market with short-term positions, perhaps to exploit the volatility of exchange rates or capitalize on brief Naira stability windows before retiring again.

March pushes total transactions greater than N1 Billion

March 2025 marked an important step for the Nigeria capital markets, recording more than 1 Billion of N1 billion equity transactions for the first time of the year – largely by transactions of foreign blocks. The total value of transactions reached 1.115 Billion de Nairas, more than double of 509.47 billion Nairas in February and well before Januan N607.05 billion.

In annual shift, the figure is up 107.14% compared to 538.54 billion nairas recorded in March 2024.

At the official NAFEM exchange rate of $ 1,536.82 / $ 1 in March, the total volume translates into approximately $ 725.86 million, an increase of $ 341.36 million in February.

National investors retreat in the midst of a foreign increase

Interestingly, national investors withdrew in March despite the global market rally. Total national transactions decreased by 10.98% by 466.82 billion nairas in February to 415.62 billion nairas in March. January had experienced a stronger interior activity at 535.54 billion nairas.

Retail investors represented 197.12 billion in March, down compared to 214.51 billion Nairas in February and 267.35 billion Nairas in January. Institutional investors contributed to 218.50 billion Nairas – also a drop compared to 252.31 billion Nairas in February and 268.19 billion Nairas in January.

While national investors still constituted the majority of total transactions in the first quarter of 2025, N1,41798 Billion or 63.53%, their share is down. In T1 2024, domestic transactions represented 86.23% of total market activity.

A change in market dynamics

The data suggests a potential turning point in the Nigeria capital market in March 2025 being the first time in more than a year that foreign transactions have exceeded internal transactions in monthly value. This change is aligned with the broader efforts of Nigeria to ward off international capital, in particular the liberalization of the FX and the interest rate increases initiated in mid-2023.

Between 2007 and 2024, national investors dominated the Nigerian stock market. Interior transactions increased from 3.556 Billions of Nairas in 2007 to 4.735 Billions of Nairas in 2024, while foreign transactions increased more modestly by 616 billion Nairas to 852 billion Nairas. But March’s developments refer to a rebalancing, although the one that could be temporary.

Despite the government’s pressure for liberal reforms, the feeling of investors remains fragile. The volatility of the exchange rate continues to present a risk. The Naira depreciated from 1,492.49 N $ / $ 1 in February at $ 1,536.82 / $ 1 in March, a trend that could discourage supported foreign interest.

Meanwhile, inflation accumulated in March at 24.23% in March, reversing a brief slowdown to 23.18% in February after the rebass consumer consumer price index. The increase was largely due to the increase in food and transport prices, driven by higher logistical costs and FX pressures.

The point of inflation aggravates the challenge of monetary political authorities. Although the Central Bank of Nigeria has tightened interest rates to make local assets more attractive, the cost of life crisis that accompanies it and the instability of Naira complicate the transmission of policies.

Analysts believe that the rise in foreign transactions has been motivated by speculative capital rather than a long -term renewed confidence. The almost equal entries and outputs underline a prudent strategy of foreign investors – entering when the conditions seem favorable, only to leave quickly when the risk levels increase.