Nigeria has been identified as a strong emerging market for global investors, following a series of economic reforms that are beginning to impact key sectors of the economy.
Veteran investor Michael McGaughy, founder of the Research Alpha fund, has described the country as having one of the most attractive equity investment prospects in the world.
Drawing comparisons to Indonesia’s resurgence after the Asian Financial Crisis, McGaughy described Nigeria as having “the world’s best equity set-up,” driven by fundamental reforms and market dynamics that favour long-term growth.
McGaughy’s Research Alpha fund, which has delivered a return of over 130% since inception, has maintained positions in Nigerian equities since 2017.
According to him, these investments are now beginning to pay off as the impact of Nigeria’s reforms takes hold.
The country’s transformation, he noted, began following the inauguration of President Bola Tinubu nearly two years ago.
Tinubu’s administration introduced bold policy changes, including the removal of fuel subsidies, liberalisation of electricity supply, and the unification of the exchange rate—moves McGaughy described as a “developmental economist’s dream.”
A major milestone in this reform effort is the Dangote Refinery, which is expected to significantly cut the cost of fuel imports and position Nigeria as a key exporter of refined petroleum products across West Africa.
“It’s large enough to meet the region’s needs, meaning Nigeria could soon become a net exporter of refined products,” McGaughy said in an interview with Asian Century Stocks.
At the heart of Nigeria’s economic revival is the Central Bank of Nigeria (CBN), under the leadership of Governor Olayemi Cardoso. Since assuming office in September 2023, Cardoso has pursued a firm monetary policy aimed at restoring stability and investor confidence.
Among the central bank’s decisive actions was the 875-basis-point hike in the Monetary Policy Rate, pushing it to 27.5% in 2024.
Despite global oil price fluctuations, Nigeria’s stock market has responded positively to the reform agenda.
