Foreign Investors Pour Record Funds Into African Stocks as NGX Sees N2.03 Trillion

Markets · Africa

Foreign money is returning to African equity markets at a pace not seen in years, lifting turnover on exchanges from Lagos to Nairobi. For non-resident investors, the practical path into these markets now runs through a clearer set of brokers, custodians, and repatriation rules than in previous cycles.

The Main Exchanges Foreigners Can Trade

Five exchanges dominate African equity trading for foreign portfolios. They are the Johannesburg Stock Exchange in South Africa, the Nairobi Securities Exchange in Kenya, the Nigerian Exchange Group in Lagos, the Casablanca Stock Exchange in Morocco, and the Egyptian Exchange in Cairo.

The Johannesburg Stock Exchange is the largest by market capitalisation and liquidity. South Africa maintains a largely open capital account for portfolio flows, meaning foreigners may buy and sell listed equities freely after standard KYC and AML checks.

The Nairobi Securities Exchange is a smaller but accessible market. Foreign investors can open Central Depository and Settlement Corporation accounts via NSE-licensed brokers using passport identification and bank or custodian details.

The Nigerian Exchange Group routes foreign orders through local NGX trading members. Trades settle through the Central Securities Clearing System, the central clearinghouse for Nigerian equities.

The Casablanca Stock Exchange and the Egyptian Exchange complete the main five. Morocco’s exchange has no restrictions on foreign participation in listed securities, according to the U.S. State Department’s 2025 Investment Climate Statement.

Broker Access for Non-Residents

Foreigners can access most African exchanges through two main routes. The first is an international broker that routes orders to the local market.

The second is a local exchange member that opens a non-resident account. In South Africa, these accounts are often linked to non-resident rand or custodian accounts.

In Kenya, foreign investors open CDSC accounts through NSE-licensed brokers. There are no broad foreign-ownership caps on most NSE-listed companies, though certain strategic sectors may have local-ownership rules.

In Nigeria, foreign buyers must register with the Central Bank of Nigeria under the Foreign Portfolio Investment regime. They obtain Certificates of Capital Importation to ensure future repatriation of capital and dividends.

International brokers that offer African equities typically handle the local paperwork. Minimums vary by broker and market, often reflecting local board lot sizes rather than a fixed cash threshold.

Nairobi Securities Exchange Foreign Flows

Foreign investor participation on the Nairobi Securities Exchange swung sharply across 2025. In the first quarter, foreign investors averaged 38.24% of total equity turnover, down 5.59 percentage points from 43.83% in the fourth quarter of 2024.

The second quarter brought a rebound. Foreign participation averaged 46.68%, an 8.44 percentage point increase from the first quarter, according to Kenya’s Capital Markets Authority Statistical Bulletin.

Monthly data showed the volatility. Foreign participation hit 59.51% of turnover in April 2025, then dropped to 36.06% in May and 44.47% in June.

The third quarter reversed again. Foreign participation fell to an average of 30.12%, a 16.56 percentage point decrease from the second quarter.

Foreign investors sold more than they bought in the third quarter. Purchases totalled KSh 11.76 billion and sales reached KSh 15.06 billion, producing net outflows of KSh 3.84 billion, about US$30 million.

Nairobi Index Performance

The foreign participation numbers track shifts in investor sentiment rather than a single index level. Kenya’s Capital Markets Authority reports the figures quarterly, with the Q3 2025 bulletin showing the sharpest decline of the year.

Finance in Africa, citing CMA data, put foreign participation at 28.01% in September 2025, down from 31.28% in August. That monthly slide contributed to the weak third-quarter average.

For foreign investors, these swings matter because they signal local versus external demand. A rising foreign share of turnover often accompanies larger inflows, as seen in April 2025.

The number of foreign accounts fell slightly across the year. Foreign corporate investors declined from 391 in Q1 2025 to 381 in Q2, while foreign individual investors fell from 8,046 to 7,997.

No single NSE index level is available in the research batch. The participation rates remain the clearest verified measure of foreign activity on the Nairobi market.

NGX Lagos Foreign Inflows Hit a 2007 Peak

Nigeria produced the standout foreign flow story of 2025. Between January and October, foreign investor transactions on the Nigerian Exchange Group reached N2.03 trillion, the highest level since 2007.

That N2.03 trillion figure is roughly US$1.35 billion at prevailing naira rates in late 2025. The previous year’s comparable period saw N744.34 billion.

Foreign inflows in the first ten months totalled N1.12 trillion, exceeding outflows of N909.56 billion. The net inflow marked a decisive shift from earlier years.

Foreign investor market share climbed to 21.18% through October 2025, up from 16.65% in the same period of 2024. Year-over-year foreign transactions grew 172.37%.

By November, the full-year picture showed foreign portfolio investments at N2.19 trillion, or 20.77% of total NGX equity transactions. Domestic investors contributed N8.35 trillion, or 79.23%.

NGX March Shock and Full-Year Momentum

March 2025 marked the single most dramatic month for foreign participation on the exchange. Foreign portfolio transactions leapt from N42.65 billion in February to N699.89 billion in March, a 1,541% increase.

Foreign investors accounted for 62.74% of total equity transactions that month. Foreign inflows reached N349.97 billion, nearly equal to outflows of N349.92 billion.

The March surge meant foreign investors injected N814.05 billion in the first quarter, representing 36.47% of total N2.23 trillion transactions.

The momentum cooled in later months but remained elevated. Through July, total foreign portfolios stood at N1.28 trillion, more than double the N598 billion recorded in the same period of 2024.

By year-end, foreign share of NGX trading rose from 15.98% in 2024 to 20.77% in 2025, according to AllAfrica citing NGX data.

Casablanca and Cairo Access

Morocco keeps its equity market open to foreign capital. The U.S. Department of State’s 2025 Investment Climate Statement confirms the Casablanca Stock Exchange has no restrictions on foreign participation in listed securities.

That open regime covers both direct foreign buying and portfolio investment. Foreign investors trade through licensed Casablanca brokers under standard account-opening rules.

Cairo’s Egyptian Exchange is the fifth major venue. In the first half of 2025, the EGX attracted 123,000 new retail investors, according to the exchange chairman cited by Zawya.

The EGX30 index, Egypt’s benchmark of the 30 most liquid stocks, climbed 11.6% in the third quarter of 2025, according to Amwal Al Ghad.

The Cairo exchange serves both domestic retail and foreign institutional flows. Access for non-residents runs through local brokerage firms and international banks active in Egypt.

Index Performance With Dates

The verified index data in the research batch centres on Egypt. The EGX30 climbed 11.6% in the third quarter of 2025, a strong local-currency gain for the benchmark of the 30 most liquid Egyptian shares.

In Kenya, the Capital Markets Authority’s quarterly bulletins provide participation rates rather than headline index closes. The Q3 2025 bulletin shows the 30.12% average foreign participation figure.

In Nigeria, the NGX data highlight transaction values rather than a single index level. The N2.03 trillion foreign transaction figure for January through October 2025 is the core performance marker.

For South Africa and Morocco, the research batch contains access rules but not specific index closes with dates. The State Department’s 2025 Morocco statement confirms the open participation regime.

Investors should treat exchange-reported flow and participation data as the most current verified performance evidence for 2025 and early 2026.

Currency Risk and Repatriation

Currency risk differs sharply across these markets. South Africa’s rand, Kenya’s shilling, Nigeria’s naira, Morocco’s dirham, and Egypt’s pound each move on separate monetary and commodity cycles.

The naira’s weakness makes conversion figures essential. Kenya’s third-quarter net outflow of KSh 3.84 billion equalled about US$30 million, showing how local-currency figures shrink in dollar terms.

Nigeria’s Certificate of Capital Importation regime is the most formal repatriation safeguard. Foreign investors must register inflows with the Central Bank of Nigeria and hold CCIs to ensure capital and dividends can exit.

South Africa imposes a 20% dividends tax on non-residents, though double tax treaties may reduce that rate. Non-residents generally face no capital gains tax on South African listed shares in most cases.

For US dollar or euro based investors, a strong local-currency index gain can still produce a foreign-exchange loss. The EGX30’s 11.6% third-quarter rise in 2025, for example, must be measured against the Egyptian pound’s movement.

Minimums and Practical Entry Points

The research batch does not specify fixed cash minimums for foreign investors on any of the five exchanges. Minimums are generally set by individual brokers and by local board lot sizes.

In Kenya, account opening requires a passport and bank or custodian details. The CDSC account can then hold shares bought through an NSE-licensed broker.

In Nigeria, the practical minimum includes the cost of obtaining a Certificate of Capital Importation through a bank or broker. That process is a regulatory prerequisite, not a trading fee.

International brokers offering access to African equities bundle these local steps. They act as the non-resident account holder with the local custodian and clearing system.

Investors should request broker-specific minimums for each market. The verified figures in the research batch cover flows, participation rates, and index moves, not brokerage minimum account sizes.

What Foreigners Should Watch Next

Nigeria’s foreign participation will be a key test in 2026. The N2.03 trillion October 2025 record and the 20.77% full-year foreign share show strong momentum, but the annual figure remains below historical peaks.

Kenya’s foreign participation swung from 59.51% in April 2025 to 28.01% in September. That volatility suggests foreign flows respond quickly to local macro news and global risk appetite.

Morocco’s open participation regime and Egypt’s expanding retail base point to different investor mixes. Casablanca leans on institutional foreign flows, while Cairo added 123,000 new retail investors in the first half of 2025.

South Africa remains the deepest and most liquid market. Its largely open capital account and established non-resident account structures make the JSE the default entry point for many foreign portfolio managers.

For non-residents, the core decisions are broker selection, repatriation paperwork, and currency hedging. The five main exchanges now offer clearer access than at any point in the past two decades.

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