Nigerian stocks deliver world’s second-best dollar returns in 2026, recover $21bn

Nigerian equities have delivered the world’s second-best dollar returns this year, rising 31 percent in 2026 and recovering about $21 billion in market value lost after the naira devaluation in 2024.

Market capitalisation on the Lagos exchange has climbed to about $84 billion, roughly 58 percent higher than levels recorded before the currency collapse.

Bloomberg reported on Tuesday that Nigeria’s benchmark index has surged 31 percent this year.

“The rally far outpaces the 11% gain in the broader emerging-market index and the 6.4% advance in a gauge of frontier-market stocks,” the publication said.

Analysts attributed the gains to improved corporate earnings, a firmer naira and renewed investor confidence.

Olabode Williams, analyst at SBG Securities Ltd., said companies affected by the naira’s fall have stabilised their balance sheets and returned to profitability.

“Companies hit by the naira’s fall have shored up their balance sheets and returned to profitability. A lot of investors are now pricing in growth, and the market is responding positively,” he said.

“The rally shows that Nigerian equities are increasingly attractive to both local and foreign investors, especially after years of underperformance,” he added.

The naira has also strengthened, recording a more than seven percent gain against the dollar this year and ranking as the world’s second-best performing currency among those tracked by Bloomberg.

“Stock gains have also been underpinned by a firmer naira, now the world’s second-best performing currency this year of those tracked by Bloomberg with a more than 7% advance against the dollar,” Bloomberg said.

Foreign participation has risen alongside the rally, with data from the Nigerian Exchange Group showing that non-Nigerian trading in local equities reached a 19-year high in 2025.

Transactions by foreign investors tripled to N2.65 trillion ($1.97 billion) from N852 billion in the previous year.

Gloria Fadipe, analyst at CSL Stockbrokers Ltd., a unit of FCMB Group Plc, said the market could exceed $100 billion this year if major listings proceed.

“If these listings happen, we could see up to 34% capital gains this year,” she said, referring to the planned listings of Aliko Dangote’s refinery and fertiliser plant.

Bloomberg said the rebound follows broader economic reforms, including the unification and liberalisation of the foreign-exchange market under President Bola Tinubu.

“The devaluation was part of President Bola Tinubu’s push to unify and liberalise the foreign-exchange market and bring in investment,” the report said.