West Africa's largest financial market has recovered to a record year. Yet that story risks being swamped.
Among the many emerging markets journeys in 2025, Nigeria's may be up there with the strangest. As it moves into a new year, the perception is also emblematic of a decades-long recurring theme in EM: shaded by competition of narratives, including narratives foisted from beyond their borders.
And in this case they couldn't be more stark: Nigeria’s stock market, after a few rough years, has been on fire in 2025. In the first seven months of the year, investors have gained N 25.7 trillion, driven by strong sectors, growing domestic participation, and improving macro‑policy conditions. In a year featuring lots of strong EM returns, Nigeria is near the top of the pack.
Meanwhile Donald Trump has re-designated Nigeria as a “Country of Particular Concern” on religious freedom grounds, citing alleged mass killings of Christians, even warning of possible military intervention if Abuja does not curb the violence. Nigeria’s government strongly rejects those the accusations, calling them based on “misinformation and faulty data,” and has defended its record on religious tolerance.
So, which of these should smart money care about?
State of Play: Nigeria is staging an optimistic rebound — equities have surged upward and confidence is returning. By May 2025, the country's All‑Share Index had pushed higher, contributing to a N 4.1 trillion gain over the month and in July, the NGX recorded a 16.5% monthly return, as market capitalization climbed to N 88.4 trillion. Key sectors leading the rally have included industrial goods, banking, and insurance.
Much of this strength is credited to policy reform ushering in tighter monetary policy and currency stabilization. Local institutional investors, like pension funds, along with early-moving foreign capital, have rotated into equities and blue-chip companies are growing in scale, as a result. MTN Nigeria, for instance, is among firms now valued in the trillions of naira after the rally.
That's the good news. Conversely, violence in rural Nigeria, especially in the Middle Belt, has indeed proven to be a challenge for internal security - and now, following the spotlight from Trump, global image and potentially a lasting rally. Analysts from the Council on Foreign Relations note that much of the violence has complex roots: in land disputes, resource pressures, and idiosyncratic insurgency that is still a feature throughout interior West Africa — and not simply religious persecution. Whether that nuance matters, however, is a different question.
A look across the frontier and second-tier EM outperformers this year yields a number of similar situations: effective policy maneuvers boosting markets, even while social and political pressures simmer underneath. It isn't uncommon for both to exist simultaneously.
But the contour of that story matters. Nigeria's rise suggests renewed investor belief that reform and macro stability can durably take hold. The big bang upwards may have come and gone, but continued risk-adjusted opportunity, especially in large-cap, industrial, and consumer names, is still on offer going into 2026.
If that narrative holds, though. The geopolitics are to be taken seriously (even if intervention in Nigeria is surely not). Domestic influences on Trump's thinking - whether they be ideological (as in Venezuela) or religious, as here - are splintered and unpredictable. But the levers available from an international financing perspective are real and impactful, especially for EMs like Nigeria that still rely heavily on engagement and flexibility at a macro level.
OQ View: That risk, rather than the troubling (if very long-running) strife in Nigeria's heartland potentially underlying it, is material. However, screening for the US President's latest fixation will exclude a long and ever-increasing list of growth markets. Paying attention only to it, alone, means a missed opportunity.
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