Nigeria’s stock market is delivering the strongest returns of any major equity market in the world this year, yet foreign investors are largely staying away, preferring the safety of high-yield government securities over local equities despite a record-breaking rally.
The Nigerian Exchange (NGX) has surged about 66 percent year-to-date, outperforming every major global benchmark. However, overseas portfolio managers accounted for only 12 percent of total trading activity in the first half of 2026, down sharply from 27 percent in the same period last year, according to NGX data. Domestic institutional and retail investors have filled the gap, powering the market to successive record highs.
Rather than increasing exposure to equities, foreign investors have channelled capital into Nigeria’s short-term sovereign debt, where yields remain close to 20 percent, offering attractive returns with lower perceived risk.
“Foreign investors instead favored Nigeria’s short-term debt, where average yields offer a relatively risk-free return,” said
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