Lagos — Nigeria’s stock market ended Wednesday on a positive note, with the NSE30 index advancing by 0.26%. Nigerian equities could continue to find near-term stability on the back of global developments in the crude oil market. Heightened geopolitical tensions, particularly the ongoing Ukraine-Russia conflict, have raised concerns about potential disruptions to global energy supplies, providing some support for oil prices. While mixed U.S. inventory data and increased production from Norway have weighed on crude prices, the expectation of delayed production hikes by OPEC+ is seen as a stabilizing force. These factors could support a bullish near to medium-term outlook for Nigerian stocks, as higher oil revenues are expected to support oil-dependent sectors and improve domestic corporate earnings.
Meanwhile, Lagos State Governor Babajide Sanwo-Olu has stressed the urgent need for Nigeria to shift toward an export-driven economy to address the nation’s ongoing economic challenges, particularly the foreign exchange crisis. The Governor expressed his concerns on the detrimental impact of Nigeria’s heavy reliance on crude oil and gas exports. He called for a strategic focus on exporting processed materials, rather than raw resources. This transition could contribute to a more diversified and sustainable economic base, supporting the long-term outlook for the Nigerian equity market. In this regard, the Dangote refinery could participate in reducing the dependence on imported refined fuels and help alleviate foreign exchange pressures.
Governor Sanwo-Olu also stressed the importance of infrastructure development, particularly in transportation and logistics, with key projects such as the Lekki Deep Sea Port which could drive industrial growth. While short-term risks, including potential delays or funding challenges, may weigh on investor sentiment, the long-term prospects for economic diversification and infrastructure development are quite positive for Nigerian stocks.
*Daniel Wesonga, Senior Sales Manager at Pepperstone
