… Despite N11.1trn July gain

By Peter Egwuatu 

Nigeria’s stock market reversed course last week as widespread profit-taking erased N1.261 trillion from investors’ portfolios, ending the week in negative territory after a sustained rally.

The decline followed renewed selling pressure across major banking, industrial and consumer goods stocks as investors cashed in on the strong gains recorded in recent weeks.

Data from the Nigerian Exchange Limited (NGX) showed that market capitalisation fell by N1.261 trillion to close at N158.326 trillion, compared with N159.587 trillion in the preceding week.

Similarly, the benchmark NGX All-Share Index (ASI) declined by 0.83 per cent to 245,283.68 points from 247,357.40 points, reflecting the broad-based weakness across the market.

Despite the weekly setback, the market still posted a robust monthly performance, with investors gaining N11.109 trillion in July. Market capitalisation climbed from N147.217 trillion at the end of June to N158.326 trillion by the close of July, underlining the strength of the rally before last week’s correction.

The sharp monthly appreciation encouraged many investors to lock in profits, particularly in stocks that had recorded significant price gains.

Market breadth also deteriorated during the week, signalling a stronger bearish sentiment. Only 33 stocks advanced, down from 57 in the previous week, while 56 equities declined, compared with 38 losers a week earlier. A total of 58 stocks closed unchanged, up from 51 recorded previously.

Analysts at InvestData Consulting Limited attributed the downturn largely to profit-taking in highly capitalised and actively traded stocks, especially within the banking sector.

“The emergence of fresh 52-week lows amid the broader market decline suggests that some investors are becoming increasingly cautious about individual stocks, even as the overall NGX remains significantly higher on a year-to-date basis,” the firm said.

Looking ahead, the analysts expect cautious trading to persist in the near term.

“The NGX enters the new trading week with a cautious short-term outlook following last week’s broad-based selloff. Profit-taking is likely to remain a dominant feature of the market as investors continue to lock in gains from the strong rally recorded so far this year,” they added.

Nigeria needs a coordinated industrial growth strategy, beyond macroeconomic reforms, to unlock investment in the manufacturing sector and accelerate economic expansion.

Chief Executive Officer of CFG Advisory, Mr. Tilewa Adebajo, stated this in an interview on CNBC Africa. He noted that reforms such as exchange rate liberalisation and broader macroeconomic adjustments should be regarded as the foundation for growth rather than the destination. 

Adebajo argued that without deliberate policies to boost production, infrastructure and industrial investment, Nigeria would struggle to achieve sustainable economic transformation.

According to him, the current growth rate of about four per cent is insufficient for an economy with Nigeria’s population and development needs. He said the country needs to consistently grow between eight and 10 per cent annually to significantly improve productivity, create jobs and raise living standards.

He noted that manufacturing remains constrained by structural challenges, including high financing costs, inadequate infrastructure and the absence of a long-term industrial development framework.

“Reforms alone are not the magic bullet. We need growth strategies that remove the structural impediments limiting productivity and investment,” Adebajo said.

He warned that government borrowing and rising debt-service obligations are crowding out private sector investment by keeping interest rates elevated. With Treasury bill yields remaining attractive and commercial lending rates reaching as high as 35 per cent for some businesses, manufacturers are finding it increasingly difficult to finance long-term expansion.

According to him, fiscal discipline must complement monetary, trade and industrial policies to create a more competitive environment for productive investment.

Adebajo also called for a pipeline of large-scale bankable projects capable of stimulating industrial growth. 

Beyond major investments such as the Dangote Refinery and Nigeria LNG Train 7, he said Nigeria needs fresh investments in power, transport infrastructure, agro-processing and manufacturing clusters to deepen industrial capacity.

He urged policymakers to leverage Nigeria’s large domestic market and the African Continental Free Trade Area (AfCFTA) to attract export-oriented manufacturers. 

Adebajo asserted that Nigeria’s reform programme will ultimately be judged not by macroeconomic stability alone, but by its ability to translate policy reforms into stronger manufacturing investment, higher productivity and sustained economic growth.

The Manufacturers Association of Nigeria (MAN) has called for urgent tax harmonisation, improved infrastructure, reliable energy supply and a predictable regulatory environment to strengthen the country’s manufacturing sector.

The appeal was made at the 41st Annual General Meeting (AGM) of the Ogun Branch of MAN in Abeokuta, with the theme: “Building a Resilient Manufacturing Sector: Surmounting the Challenges of Fiscal and Regulatory Policies and Tariffs.”

Speaking at the event, MAN President, Francis Meshioye, said manufacturers had borne the brunt of the Federal Government’s economic reforms over the past three years, resulting in rising production costs, declining investments and mounting operational pressures.

“Resilience in manufacturing means the capacity to absorb economic shocks, adapt to policy changes, remain competitive, and continue producing, investing and creating jobs despite prevailing challenges,” he said.

Meshioye identified predictable fiscal policies, smart regulation, affordable energy, improved infrastructure, access to single-digit interest loans and protection against unfair imports as critical to repositioning the sector.

He urged governments at all levels to ensure taxes, levies and tariffs remain predictable, while regulatory agencies should prioritise industrial growth instead of revenue generation.

According to him, MAN has secured concessions on safety audit fees and facilitated engagements on water abstraction charges and environmental compliance, but stressed that multiple taxation and poor industrial roads still require urgent attention.

“We need sustained public-private dialogue, harmonisation of regulatory requirements and the rehabilitation of industrial roads in Agbara, Ota and Sagamu,” Meshioye said.

He also called for improved access to finance, energy and foreign exchange, urging the Federal Government to clarify the implementation of the 2025 tax laws, oppose retroactive taxation and direct the Central Bank of Nigeria (CBN) to settle outstanding foreign exchange forward obligations owed to manufacturers.