Nigeria and other major African stock markets are beneficiaries of weakening dollar as President Donald Trump’s sweeping tariffs puts global investors in a cautious mood.
Charlie Robertson, head of macro-strategy at FIM Partners said, “Africa, like much of emerging markets (EM), does well when the dollar is weak… and when Trump isn’t paying them much attention.”
His position confirmed a BusinessDay report that in the world rattled by war, inflation, and erratic trade policies, some of the savviest investors are quietly shifting their attention back to Nigeria.
“Good to see some African equity markets powering ahead this year: Egypt (+16 percent in US dollars); Nigeria (+22 percent in US dollars); Kenya (+39 percent); and Morocco up 45 percent (I didn’t expect that),” Robertson added.
Trump has delayed reciprocal tariffs until August while adjusting rates for 14 countries, triggering market volatility and currency declines.
Foreign portfolio investors (FPIs) in the Nigerian equities market traded N996.03 billion worth of stocks in five months to May 2025 as against N458.29 billion seen in the corresponding period of 2024.
Read also: FPIs lead dollar inflows as investor confidence grows
Global stocks are fluctuating as markets search for positives in Trump’s latest trade policy shifts. The US president has moved his July 9 deadline for the resumption of ‘reciprocal’ tariff rates to Aug. 1, giving countries three extra weeks to negotiate trade deals.
The S&P 500 fell 0.8 percent on Monday as Trump sent letters about impending tariffs to South Korea and Japan. Traders are on edge on Trump’s unpredictability.
The naira recorded a gain of N90 or 5.7 percent in the black market and 0.8 percent in the official foreign exchange (FX) market in the first half (H1) of 2025, supported by rising dollar inflows, largely driven by foreign portfolio investors (FPI).
Data from the Central Bank of Nigeria (CBN) showed that the naira appreciated by N11.65 in the official market, closing at N1,529.71 on June 30, 2025, the last trading day, compared to N1,541.36 quoted at the beginning of June.
In the parallel market, the naira strengthened from N1,660 per dollar at the start of June trading to N1,570 by the end of the month, representing a N90 gain or 5.7 percent. The improved exchange rate performance reflected a stronger inflow of foreign exchange and increased market confidence.
Lagos-based Vetiva said while Tuesday’s surge reflected revived risk-taking, “the scale of gains across speculative names suggests traders may test profit-taking levels soon.”
“However, with market breadth still firmly positive and the rally backed by rotational positioning, sentiment remains positive. Investors are likely to stay active as they anticipate H1’25 earnings releases and reassess portfolio allocations,” the analysts added.
