Retail investors on the Nigerian Exchange (NGX) traded N2.33 trillion worth of equities between January and August 2025, compared to N3.13 trillion by institutional investors, the narrowest gap in nearly two decades.
This marks their strongest showing since 2008, when the market crash wiped out household wealth and investor confidence, leading to a long period of institutional dominance.
Data from the NGX covering 2007 to 2025 show that retail investors now account for nearly half of all domestic trades, up from years of marginal participation largely controlled by pension funds and other institutional players.
Market analysts attribute this resurgence to increased access to digital trading platforms, the rise of social investing culture, and growing financial awareness among Nigerians seeking alternatives to inflation-eroded savings.
“This is the most significant retail reawakening since the post-2008 slump,” said Chief Executive of Highcap Securities Limited, David Adonri.
“Access to mobile trading, better market data, and the hunger for short-term profit have brought individuals back. But the risk is that many may still be speculating without adequate financial education,” he added.
This renewed retail participation represents a healthy sign of deepening market inclusion if sustained responsibly.
From fringe to force
Retail investors once made up a negligible portion of the market. But in 2025, they’ve become a stabilizing and liquidity-enhancing force.
Data from the NGX shows that retail transactions accounted for 43% (N2.33 trillion) of the total domestic transactions of N5.46 trillion in the first eight months of the year.
In the first 8 months of the year, the domestic market recorded the highest transactions in July with N1.669 trillion. Retail transactions stood at N516.5 billion, before easing to N343.7 billion.
Institutional activity also slowed from N1.15 trillion to N392.9 billion, indicating that both classes probably responded similarly to market cycles.
This can be attributed to the surge in retail activity; a mix of wider internet penetration, mobile trading apps, better financial literacy, and attractive dividend yields from blue-chip companies.
Domestic confidence sustains market growth
The overall picture for 2025 underscores how local investors, both individual and institutional, are anchoring Nigeria’s capital market revival.
- Total turnover on the Exchange reached N6.92 trillion between January and August 2025, nearly double the N3.4 trillion recorded in the same period of 2024.
- Domestic investors were responsible for N5.46 trillion, representing 79% of total trade, while foreign investors contributed N1.45 trillion (21%)—both at their highest levels since 2015.
“The domestic market has shown resilience,” said Tajudeen Olayinka, CEO of Wyoming Capital and Securities Limited.
“Institutional investors still set the tone, but retail participation is expanding fast, supported by technology and improved corporate earnings.”
Early momentum and March surge
In the first two months of the year, local investors carried the market almost single-handedly.
- In January, domestic players dominated trading with N535 billion, or 88% of turnover, while foreigners contributed N71.5 billion.
- February showed a similar pattern, with N458 billion from locals versus N42 billion from foreign sources.
On foreign participation, March marked a dramatic twist.
- Foreign portfolio investors poured in N699 billion, the highest monthly inflow in a decade, accounting for 63% of that month’s total turnover of N1.12 trillion.
According to Blakey Ijezie, founder of Blakey Ijezie & Co (Chartered Accountants), such spikes show that “offshore capital reacts strongly to reform signals like exchange rate realignments or fiscal clarity—but these flows are tactical, not always long-term.”
After March, foreign activity receded, but the momentum from domestic investors, especially retail traders kept turnover elevated through midyear.
Homegrown liquidity dominates
From April to July, local dominance deepened. In May, domestic trades reached N582 billion (83%), and by July, they soared to N1.67 trillion (92%), the year’s highest monthly figure.
This consistency underlines that Nigeria’s market depth increasingly depends on homegrown capital, cushioning against volatile foreign flows.
Adonri noted that this trend “demonstrates that the Nigerian market is maturing, shifting from dependency on foreign liquidity toward sustainable domestic participation.”
Retail power and market depth
The rise of small investors is reshaping market behaviour. Once reactive, they are now setting short-term sentiment in sectors like banking, consumer goods, and industrials.
While institutions provide stability, retail traders inject momentum and liquidity, making daily trading more dynamic.
Yet, experts warn of potential pitfalls. “Retail exuberance can fuel bubbles,” Adonri cautioned. “We need sustained investor education and regulatory oversight to ensure their participation translates into market depth, not volatility.”
Why retail investors returned
Several factors underpin the renewed enthusiasm among retail players:
- Lower entry barriers: NGX-authorised digital platforms now allow Nigerians to start trading with as little as N5,000.
- Yield compression: Declining Treasury bill and bond yields have pushed savers toward equities seeking higher real returns.
- Blue-chip dividends: Banks, telcos, and energy firms have delivered strong payouts, reinforcing confidence in long-term value.
- Improved financial literacy: Nationwide campaigns and social media influencers have demystified investing for first-time participants.
As Aruna Kebira, CEO of Globalview Capital, noted, “Falling fixed-income yields—down by more than 150 basis points—made equities relatively attractive. That’s why we’re seeing both institutional and retail inflows at once.”
Foreign flows still volatile
Despite record participation from all fronts, foreign capital remains fickle. Offshore inflows surged in March, then dropped sharply in subsequent months.
“Foreign investors still behave like short-term traders,” said Adonri. “They enter on optimism and exit on the slightest policy wobble.”
Analysts like Ijezie agree that policy stability—especially around FX management—is key to converting these tactical inflows into sustainable commitments.
“Foreign investors will stay longer when the naira is predictable, inflation is moderate, and policy direction is credible,” he said.
Reform-driven prospects
Looking ahead, analysts believe sectoral reforms—such as NAICOM’s planned insurance recapitalisation and energy liberalisation could attract both retail and institutional inflows into the primary market.
Kebira drew parallels with the 2004 banking consolidation, noting that “recapitalisation cycles tend to deepen equity culture and encourage new listings, which benefit the NGX over time.”
Risks behind the numbers
Despite the optimism, some experts caution that not all liquidity entering the market is productive or transparent.
“A jump from N3.4 trillion to N6.92 trillion in turnover warrants scrutiny,” Kebira warned. “Opaque inflows or speculative trading could distort valuations if unchecked.”
Still, the overarching sentiment remains positive: Nigerian investors, especially individuals, are showing more interest.
For the first time in nearly two decades, the Nigerian capital market is being redefined not by foreign money or institutional giants, but by millions of everyday Nigerians investing their savings, salaries, and hopes in equities and, in doing so, reshaping the country’s financial landscape.
