Nigerian Stock Market Hits 24% of GDP Amid Bullish Surge
The Nigerian stock market has seen a remarkable upturn, with its valuation now representing 24% of the nation’s Gross Domestic Product (GDP).
This milestone reflects the impact of sustained bullish activity in the equities market. As of the close of trading on Friday, the Nigerian Exchange (NGX) reported a market capitalisation of ₦89.37 trillion, marking an impressive 40% increase since the start of the year.
This stock market-to-GDP ratio highlights growing investor optimism, driven by ongoing economic reforms and policy shifts. Analysts view the relatively low ratio—still below parity—as a sign that the Nigerian stock market remains undervalued and holds strong prospects for future growth.
“It is a vote of confidence in President Bola Tinubu’s administration’s touch on the economy. Foreign investors and local investors are playing hard in the market due to improved sentiment—not on the companies of interest alone but on the overall tone from the top,” a Broadstreet analyst told MarketForces Africa.
Nigeria’s GDP was recently revised upward to ₦372.82 trillion following a rebasing that changed the reference year from 2010 to 2019. This adjustment, which raised the nominal GDP by about 41.7% for 2019 and subsequent years, supports the perception of undervaluation in the equities space when compared with emerging market peers.
Utilising the Warren Buffett stock market-to-GDP yardstick, the current ratio of 24% further affirms the market’s potential. Leading investment firms continue to assert that the NGX has room to grow, with some analysts predicting that market capitalisation could surpass ₦100 trillion by the third quarter of 2025, provided investor sentiment remains stable.
Driven by changes in macroeconomic policies, a growing number of Nigerians are exploring the stock market despite inflationary pressure, as they seek to hedge against declining purchasing power. While awareness and understanding of financial markets remain low among the broader population, those willing to take calculated risks have seen gains.
