Market News

By Helen Oji

• U.S. 14% tariff has little effect on Nigeria’s exports, Edun insists
Mounting fears of a global recession, driven by aggressive tariff policies in the United States, and a wave of economic uncertainty are sending shockwaves through stock markets worldwide, with the Nigerian Exchange Limited (NGX) not exempted.

But Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, insists that the recent 14 per cent tariff imposed by the U.S. on Nigerian exports will have a negligible effect on the Nigerian economy.

From Wall Street to the trading floors in Lagos, investors are bracing for a prolonged period of volatility, capital flight and weakened earnings outlook.

Although the Nigerian Exchange Limited (NGX) has so far been shielded from the worst of the global rout, cracks are beginning to show.

Investor sentiment is waning and foreign portfolio investors, typically quick to retreat in times of global stress, are reassessing their positions in emerging markets like Nigeria.

Trading volumes on the NGX have thinned and key indices are beginning to reflect the broader risk-off sentiment.

For instance, despite impressive financial results from major companies, including bumper dividend pay-outs by Tier-1 banks and blue-chip firms, the broader market failed to rally, with over N100 billion losses in one week, suggesting that external pressures and local uncertainties are overpowering corporate fundamentals in driving investor decisions.

Market activity was notably subdued during the week under review, reflecting the cautious mood of investors amid shortened trading sessions. Total trades dropped by 30.9 per cent week-on-week to 42,397 transactions, while both volume and value traded suffered steep declines.

The volume of shares traded also shrank by 84.3 per cent to 1.18 billion units, and the value of transactions plummeted by 92.8 per cent to N28.87 billion, underscoring the impact of weak market participation.

Yesterday, market capitalisation dipped by N600 billion from N66.147 trillion on Friday to N65.488 trillion, while the All-Share Index (ASI) declined by 1,295.02 (1.2 per cent) to 104, 216.87 from 105,511.89 achieved on Friday.

Also, virtually all blue-chip stocks depreciated on the price movement chart, as 51 stocks lost while nine constituted the gainers chart. GTCO emerged the highest price loser with 3.90 kobo to close at N65.50 kobo, while Aradel followed with N3.00 to close at N497. United Bank for Africa (UBA) lost 2.80 kobo to close at N36.85 kobo.

Transnational Corporation of Nigeria depreciated by 2.60 kobo to close at N42.10 kobo. Zenith Bank, Nigerian Breweries and FirstHolco also lost N2.40 kobo, N2.00  and N1.65 kobo to close at N45.50 kobo, N32 and N24.35 kobo respectively.

The trigger came last week when U.S. President Donald Trump imposed sweeping tariffs, including a 10 per cent levy on all imports, with even steeper rates of 34 per cent on Chinese goods and 20 per cent on products from the European Union (EU). The move has not only intensified trade tensions but also stoked fears that the world’s largest economy could be heading for a downturn.

Already, analysts at JPMorgan and Goldman Sachs have raised their projections for a U.S. recession in 2025 to 60 per cent and 45 per cent, citing weakening consumer sentiment, disrupted supply chains and shrinking global trade volumes.

In Nigeria, analysts have warned that more significant outflows could occur if global conditions worsen, and the Central Bank of Nigeria (CBN) fails to maintain exchange rate stability.

EDUN, at the inaugural Corporate Governance Forum organised by the Ministry of Finance Incorporated in Abuja, yesterday, recognised the seriousness of escalating global tariff conflicts and emphasised that Nigeria remains relatively insulated from severe impacts, given the exclusion of oil and mineral exports, Nigeria’s primary exports to the US, from the tariff.

He highlighted the comparatively moderate 14 per cent tariff as favourable when placed alongside Vietnam’s 46 per cent and China’s 34 per cent.

“Nigeria’s exports to the U.S. were N1.8 trillion, N2.6 trillion and N5.5 trillion in 2022, 2023 and 2024, respectively. Fortunately, oil and mineral exports accounted for 92 per cent, implying oil and mineral exports amounted to N5.08 trillion in value, while non-oil was just N0.44 trillion. Consequently, the tariff effect on exports is negligible if we sustain our oil and minerals export volume,” he said.

However, Edun admitted that government’s economic management team was closely monitoring the global situation.

Addressing the broader state of the Nigerian economy, Edun praised the stabilisation achieved under President Bola Tinubu’s administration.