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Businesses and investors in Nigeria are contending with an unstable stock market as international market fluctuations continue to impact the value of domestic assets.
Since mid-2024, Nigeria’s stock exchange has experienced increased volatility, primarily driven by US inflationary pressures and measures to curb the inflation that have affected emerging economies like Nigeria.
Domestic economic difficulties and concerns about global inflation, particularly from the United States, lie at the heart of this market instability. These issues are further exacerbated by inflationary pressures, a shortage of foreign currency, and the depreciation of Nigeria’s naira.
The Nigerian Exchange Group (NGX) reports that the All-Share Index has experienced gains and losses between August and October 2024.

The Nigerian stock market is not alone in facing this volatility. Global stock markets have also taken a hit, with Japan’s Nikkei 225 falling by 12.40% in a single day on 5th of August, 2024, the largest drop since 1987. Major indexes in Europe opened lower, recording losses between 1.7% and 2.8%, while US NASDAQ 100 futures saw a 5% decline.
Concerns over a potential US recession and disappointing July payroll data were the main causes of this market downturn. Additionally, the unwinding of Japanese yen positions has sent waves of volatility across global markets.
Data suggests a correlation between rising US inflation and decreased portfolio investment in Nigeria. This likely stems from capital flight as investors shift funds away from Nigeria, given the heightened tensions in global markets influenced by the US, the world’s largest economy.

Rising U.S. inflation contributes to increased volatility in Nigeria’s stock market through capital outflows, currency depreciation, commodity price fluctuations, and reduced foreign investment.
Adijat Kareem is a research and data analyst at Dataphyte with a background in Economics. She is passionate about data and storytelling in driving social change and innovation.