Nigeria’s equities market gains N18.25trn in 10 months amid Tinubu’s reforms

The Nigerian equities market appreciated by N18.25 trillion in 10 months of 2024 amid foreign exchange market, among other reforms undertook by President Bola Tinubu led-administration.

WESTERNPOST gathered that the equities market  of the Nigerian Exchange Limited (NGX) that opened 2024 at N40.918 trillion, gained N18.25 trillion to close October 31, 2024 at N59.171 trillion. 

Since assuming office in May 2023, the Tinubu-led administration   has initiated significant reforms in the country’s foreign exchange market aimed at increasing liquidity, improving transparency, and stabilizing the naira.

These changes respond to long-standing challenges, including currency shortages, multiple exchange rates, and limited foreign reserves.

Tinubu’s foreign exchange reforms represent a bold shift toward a more open and transparent FX market. The short-term impact has been challenging, with a depreciating naira and inflation, but over time, these reforms may create a more resilient and investor-friendly economy.

The success of these reforms largely depends on the government’s ability to boost foreign reserves, attract sustainable foreign investments, and support local industries to lessen Nigeria’s reliance on foreign goods.

As the Central Bank of Nigeria (CBN) sustained its foreign exchange reforms, foreign investors’ transactions in the equities market of the NGX reached a total of N696.88 billion in nine months of 2024, making it the highest record since 2018.

This is about 170.1per cent increase from N258.02billion total transactions recorded by foreign investors in nine months of 2023.

Of the N696.88billion foreign investors inflow stood at N310.99 billion in nine months of 2024 from N108.93 billion in nine months of 2023, while outflow moved from N149.09billion in nine months of 2023 to N385.89 billion in nine months of 2024.  

An investigation by WESTERNPOST revealed that in nine months of 2022, foreign investors transactions stood at N321.04 billion and in 2021, it was at N287.20 billion.

In 2020, the Exchange in its “Domestic & Foreign Portfolio Participation in Equity Trading” report disclosed that foreign investors transactions stood at N510.25billion and in 2019, the report disclosed N688.91billion total foreign investors transactions.

In addition, the report revealed N991.19 billion total transactions in nine months of 2018, before setting a new record in nine months of 2024.

The CBN recently implemented significant reforms in the foreign exchange market aimed at enhancing transparency, compliance, and market stability.

These reforms are part of the CBN’s broader strategy to create a fairer, more stable FX market and support economic growth through better monetary policies.

In tandem with these reforms, the CBN has also implemented aggressive Monetary Policy Rate (MPR) hikes, with the goal of curbing inflation and stabilizing the naira, a move supported by the International Monetary Fund (IMF).

These policies have led the Naira to depreciate to N1601.03 against the dollar in nine months of 2024 from N768.76 against the dollar in nine months of 2023.

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