Global markets contract, naira stutters as geopolitical tension persist
The noticeable economic gains and stability experienced globally earlier in the year, particularly Nigeria appear to be fading with by new and dangerous geopolitical narratives emanating from the Middle East.
Markets across the globe are witnessing contraction save the Nigeria capital market still basking in the euphoria of a successful banking consolidation and the recent robust dividend payments.
Afrinvest Monthly report, which also marked the end of the first quarter in 2026, speaks volume.
According to the report, “The flair and pomp that accompanied President Bola Tinubu’s historic state visit to the United Kingdom – the first by any Nigerian leader in 37 years – may carry symbolic diplomatic significance, but they offer little consolation for the reality that Nigeria’s macroeconomic narrative closed Q1:2026 on a negatively skewed note”.
“We examine the implications of two key developments that defined Nigeria’s macroeconomic landscape in March 2026: escalating tensions in the Middle East and President Tinubu’s fresh $6.0bn external borrowing request, despite the unresolved status of the 2026 federal budget”, said analysts at Afrinvest. .
Globally, equities markets closed March in the red, pressured by heightened global risk-off sentiment, persistent inflation concerns, and fading expectations of near-term monetary easing across major economies.
“Broad-based selloffs across developed and emerging markets outweighed pockets of resilience in selected frontier markets. Consequently, the MSCI world equities index declined 7.2% month-on-month (m/m)”, the report said.
But it was a different scenario for the Nigerian capital market as the All Share Index (ASI) rose by 4.4 per cent m/m.
The local bourse extended its bullish performance for the third consecutive month, as the NGX-ASI rose 440bps, crossing the 200,000-point mark to close at 201,287.78 points.
“This positive performance was driven by strong demand for blue-chip stocks in the industrial, oil & gas and ICT sectors amid impressive corporate earnings releases and improving macroeconomic conditions”, the report said.
But the same cannot be said about the foreign exchange (forex) market which saw the naira slipped as a result of this Middle East conflict.
The Middle East crisis dramatically jolted Brent crude prices in March with the spot price surging by more than 45.8 per cent m/m from around $71.0/bbl in February to a peak $120.0/bbl before easing to $104.0/bbl. This uptick was driven by the onset of U.S – Israeli military action against Iran and the closure of the Strait of Hormuz (through which roughly 20.0 per cent of the world’s daily oil supply transits) after ceasefire negotiations collapsed.
