Nigeria remains Africa’s top-performing stock market despite N9.8trn sell-off

The Nigerian stock market has lost nearly N10 trillion in value this month as investors rushed to lock in profits after a prolonged rally. Yet, in a striking show of resilience, the correction has failed to knock Nigeria off the top of Africa’s equity rankings.

BusinessDay’s analysis of data from African Markets, a real-time market intelligence platform, shows the Nigerian Exchange Limited (NGX) delivered a 59.5 percent return in US dollar terms year-to-date as of June 24, 2026, the highest among 17 African stock exchanges tracked. The performance extends Nigeria’s lead for a third consecutive week and highlights how macroeconomic reforms and a more stable naira are reshaping the country’s investment story.

Ghana ranked second with a 57.7 percent dollar return, followed by Zimbabwe (40.5 percent), Rwanda (38.8 percent), Tunisia (35.8 percent) and Tanzania (32.7 percent). In local currency terms, Nigeria also remains one of the continent’s strongest performers, posting a 51.1 percent gain, second only to Ghana’s 69.2 percent.

This is not the first time the West African nation has led the continent’s equity markets this year. The NGX also ranked as the best-performing stock exchange in February (34.4%) before extending its lead again in June.

The ranking marks a turnaround for a market that only a year ago was struggling with currency volatility and weak foreign investor confidence. While robust corporate earnings and banking sector reforms have fuelled equity gains, analysts say the biggest difference this year has been the naira.

Unlike previous rallies that were eroded by steep currency depreciation, the relative stability of the naira has preserved equity gains in dollar terms, making Nigerian assets more attractive to foreign investors. For global fund managers, returns are measured in dollars, not naira, and the country is now offering both strong equity performance and reduced currency risk.

“The naira’s appreciation has amplified dollar returns,” said Gbolahan Ologunro, associate portfolio manager at First Asset Management.

The naira ranked as Africa’s second-best performing currency

The currency’s resilience has helped Nigeria weather recent global volatility better than many of its African peers. While the conflict in the Middle East drove up oil prices and rattled financial markets for the past four months, the country has been less exposed than many fuel-importing economies, thanks in part to the Dangote Refinery, which has reduced the dependence on imported petroleum products. Lower fuel imports have eased pressure on foreign exchange demand, helping to support the naira.

The naira’s performance stands out against a backdrop of broad weakness across Africa. Data compiled by African Markets showed that only seven of the 17 major African currencies tracked appreciated against the dollar in May, down from 12 in April, highlighting the mounting pressure on currencies across the continent.

Against this backdrop, the naira emerged as Africa’s second-best-performing currency year-to-date as of June 28, trailing only the Zambian kwacha. It appreciated by 4.6 percent against the dollar to N1,377.6, while Central Bank of Nigeria data showed the average exchange rate strengthened by 3.4 percent to N1,382.0 as of June 26, from N1,431.1 at the start of the year.

“Nigeria has remained relatively insulated from the recent Middle East crisis because of the economic reforms implemented over the past two years,” said Tony Brown, an Abuja-based banking and finance analyst.

“One of the biggest factors has been the Dangote Refinery, which has significantly reduced the country’s dependence on imported petroleum products. Lower fuel imports have eased pressure on foreign exchange demand, helping to support the stability of the naira.”

Brown said the currency is increasingly reflecting market fundamentals, giving investors greater confidence to hold naira-denominated assets. “That improved confidence has supported both the currency and foreign portfolio investment inflows.”

The improving macroeconomic picture is already attracting capital. Africa’s most populous nation recorded $10.4 billion in capital importation in the first quarter, an 83.8 percent increase from a year earlier, with portfolio investment accounting for more than 95 percent of the inflows—the highest quarterly foreign portfolio investment on record.

At the same time, the country’s external reserves climbed above $51 billion, their highest level in 17 years, strengthening the CBN’s ability to support foreign exchange liquidity and reinforcing investor confidence in the currency.

The resilience of the naira has also cushioned the impact of the recent market correction. Since the beginning of June, the NGX has shed N9.8 trillion, or 6.2 percent, in market capitalisation, as investors took profits following one of the strongest rallies in the exchange’s history.

As of May, Nigeria had become Africa’s second-largest stock market, overtaking Morocco, according to data compiled by Afridigest, a pan-African strategic intelligence platform—an improvement from 2025, when Nigeria was the continent’s third-largest stock market.

“The market has appreciated significantly since the beginning of the year, so profit-taking, valuation adjustments and selective portfolio rebalancing were expected,” said David Adonri, vice president of Highcap Securities. “The recent movement is consistent with a consolidation of gains after a strong run, rather than a sign of structural weakness.”

The correction has weighed on some of Nigeria’s biggest listed companies, including Dangote Cement and BUA Cement, and erased almost $4 billion in less than three weeks from the paper wealth of the country’s richest businessmen. However, analysts argue that the sell-off reflects healthy market consolidation rather than deteriorating fundamentals.

Nigeria’s equity market has been supported by a combination of reforms that have fundamentally changed investor sentiment. Banking recapitalisation has strengthened confidence in the financial sector, while pension reforms have expanded the ability of Pension Fund Administrators to invest in equities, providing a deeper pool of domestic capital.

The Securities and Exchange Commission’s move to a T+1 settlement cycle, alongside higher capital requirements for market operators and extended NGX trading hours, has further improved market efficiency and liquidity.

Together, these reforms have transformed the country’s from one of Africa’s most volatile equity markets into one of its most attractive destinations for both domestic and foreign investors.

The key question now is whether the rally can withstand further profit-taking in the second half of the year. Much will depend on the sustainability of the naira’s stability, the strength of half-year corporate earnings and the continued momentum of foreign portfolio inflows.

For now, however, Nigeria’s market correction has done little to change the broader investment narrative. Despite the June sell-off, the country’s combination of improving macroeconomic stability, record foreign inflows and reduced currency risk has kept it firmly at the top of Africa’s equity rankings—a position few would have predicted just a year ago.