EPISODE SUMMARY:
The discussion examined where “smart money” is moving in Nigeria’s changing investment landscape, showing that investment decisions today are being shaped not only by wealth creation but also by survival pressures from inflation, weakened purchasing power and the search for alternative income. The conversation moved across equities, fixed income, dollar assets, valuation, risk appetite and portfolio discipline, stressing that investors must look beyond market excitement and assess fundamentals, time horizon, diversification and risk. It also explored the proposed Dangote Refinery listing, noting that while the business may be fundamentally attractive, investors should wait for formal offer documents and assess valuation, governance, earnings potential, foreign- exchange exposure and possible concentration risk in the Nigerian stock market.

Dr. Oluwanbepelumi Olanubi: Hello, everyone. Good morning, good afternoon, good evening, wherever you are tuning in today. Welcome to this episode of Kingsgate Brief. It’s been six months since our last episode, but we’re back, and we’re better. We’re returning with richer conversations, stronger expert perspectives, and a renewed commitment to helping our audience understand the forces shaping Africa, emerging markets, and the global economic landscape at large.

At Kingsgate Advisors Institute, we believe that knowledge should not remain confined to academic journals, policy meetings, financial institutions, or boardrooms. Kingsgate Brief is one of the platforms where we bring in top economists, policymakers, investors, business leaders, and experienced practitioners to break down important issues, go beyond the headlines, and provide accessible, forward- looking, actionable insights for you. Our purpose is to help individuals, busi- nesses, investors, and government institutions make better- informed decisions.

As you know, my name is Oluwanbepelumi Olanubi. I serve as Executive Director of the institution, and today I’ll be your host. Let’s sit back and enjoy the conversation. But before we dive into today’s topic, I want to encourage you to visit our social media pages: follow us on LinkedIn, follow us on Instagram, subscribe to our YouTube channel, and turn on the notification bell so you’re among the first to know when we upload new series and podcasts, which we’ll be doing every month going forward. We’ve covered a range of topics in the past, including cybersecurity, the changing financial landscape, economic uncertainty, tax reform, and more. Visit our YouTube page to explore and get a better sense of how the economic landscape is changing.

Let’s turn our attention to today’s topic, one I’m sure you don’t often see covered: where is the smart money going? What is investor appetite and positioning in Nigeria’s changing markets? Nigeria’s investment environment is evolving. Investors are trying to interpret developments across the stock market, the fixed income market, inflation, interest rates, exchange rate dynamics, and corporate performance, all of which affect investment decisions. The key question is no longer simply which asset is producing the highest return. It’s now what is driving that return, what risks are involved, and how investors should position themselves for what comes next.

By the end of today’s conversation, you should have a clear understanding of what is currently driving investor appetite in Nigeria, why capital appears to be moving, why domestic and foreign investors respond differently to the same economic and market conditions, and how to think about opportunities across equities, fixed income, dollar- denominated assets, and alternative investments. You’ll also understand what sound portfolio positioning looks like: diversification, valuation, time horizon, and risk management. And I believe that by the end of today’s conversation, you’ll better understand how investors should assess major market opportunities, including the proposed Dangote Refinery listing, without being carried away by brand recognition or market excitement.

To unpack all this, I am delighted to welcome my brother and friend, Mr Robert Omotunde. Robert is a partner, executive director, and chief investment officer at MDU Capital Limited, with more than 19 years of experience spanning banking, macroeconomic and investment research, asset management, and world class governance. His professional expertise covers equities, fixed income, currencies, commodities, and alternative assets. Over the course of his career, he has worked with institutions including Intercontinental Bank, Meristem Securities, Apel Asset Management, and Capital Sankore Securities, managing diversified portfolios in both naira and dollar. He has been responsible for investment strategy, asset allocation, portfolio construction, rebalancing, and performance management.

Robert is an associate of the Chartered Institute of Stockbrokers, the Chartered Institute for Securities and Investment in the United Kingdom, and the Chartered Institute of Bankers of Nigeria. He is also an authorised dealing clerk of the Nigerian Exchange and a Senior Fellow at Kingsgate Advisors Institute, specialising in economic policy and analysis.

Robert, it’s a pleasure to have you with us today. Thank you for joining us.

Robert Omotunde: Thank you very much, Doctor, for having me. It’s indeed my pleasure to be here.

Dr. Oluwanbepelumi Olanubi: Let’s dive right in. A good place to start is with the bigger picture. When you look at Nigeria’s investment landscape today, what does smart money actually look like beyond the headline numbers? What could it be hiding?

Robert Omotunnde: Well, smart money. I believe by “smart money” you mean the kind of money that generates significant returns for the investor, because we’re tempted to assume that if someone is rich, they must be smart. In reality, people who have money but don’t know how to manage it eventually lose it. In Nigeria today, smart money isn’t just something people chase because they want to be rich. It’s become more of a necessity because of the compendium of challenges that households, individuals, and businesses alike are having to deal with. Let’s cast our minds back roughly three years, to the appointment of the new central bank governor. That appointment changed the trajectory of the Nigerian economy. We were on a fairly good path before then. I remember it well, since that was during my research days: July 1st, 2014, the day the new central bank governor took office. The market was excited and looking forward to something different, since we had just come off four or five years under Governor Lamido Sanusi, and people thought, okay, he’s a banker, let’s see what he brings.

As an economist, the first shock came with the announcement itself: he wanted to pursue policy objectives that, in economics, are simply not achievable together. I remember thinking, “What have we gotten ourselves into?”

That was July 1st, 2014. I remember the debates back then. The rest, as they say, is history. That central bank pursued what we’d call an unorthodox economic policy for roughly ten years. He even got a second term, something none of the three governors before him had achieved. But the consequence, to put it modestly, was that it set the economy back. Actually, the more honest word is that it damaged the economy, because the central bank was delving into areas it should never have touched: fiscal, trade, and investment policy, all of which are outside its mandate. There was no more monetary policy independence to speak of.

The result was the multiple exchange rate system Nigeria ended up with. That system created a lot of bad publicity for the economy and pushed most investors out. We were dropped from several global indices we’d been part of, notably the JP Morgan Emerging Market Bond Index. Nigeria’s fixed- income market had come a long way since 2003, during the Obasanjo administration, and that trajectory was strong enough that by around 2011 to 2012, Nigeria was added to that emerging market bond index. That inclusion pushed our fixed- income market to new heights. We were doing extremely well before all those challenges set in.

Now, smart money today is having to contend with the legacy of those issues: inflation and the backlog left by the multiple exchange rate system, which has since been corrected following the new central bank appointment around 2023, putting us back on the path to a more professional central bank. We’ve seen the exchange rate come down from a high of around 1,800 naira to the dollar to around 1,400 now, and it’s fairly stable. Most indices are now considering Nigeria for inclusion again; the latest is FTSE Russell, which just announced Nigeria will be added to its frontier markets index list.

I’m saying all this to make the point that what we call smart money today isn’t about building wealth or prosperity anymore. It’s tied to survival. All the issues I mentioned created serious domestic price pressure, which people call inflation, which went as high as 34% around February 2024. Then, seemingly overnight, it dropped to 15%. That wasn’t magic, it was a rebasing of the consumer price index, the index that tracks inflation. That rebasing exercise moved the base year to around November 2024, from the previous base year of 2009, which itself was already out of step with convention, since a rebasing exercise should ideally happen every five years or so.

The result was a shock, a positive one, mathematically speaking. But people said, wait, we went from 34% to 15%, yet food prices in the market are exactly the same. And that’s because what we track is a rate of change, not the price level itself. Prices are still rising, just more slowly. A lot of Nigerians don’t realise that if inflation moves from 10% to 5% year on year, that means the rate of increase in prices has slowed from 10% to 5%. Even at 5%, prices are still higher in real terms than they were the previous year.

That brings me to a broader point: economists typically measure inflation as a flow variable, but I prefer to think of it from a stock perspective too. Anyway, let’s not bore you with the jargon. The point is that smart money today is trying to keep pace with high domestic prices, diminishing purchasing power, and both within country and cross- border migration.

Not many people realise that the migration happening today is largely a middle class phenomenon, because to migrate, your pockets need to be reasonably deep. It’s happening within the middle class, partly for economic survival, since a lot of people have lost hope in the country and left lucrative jobs to migrate elsewhere. There’s also what we’d call employment migration within the country: people leaving lower paying jobs for better paying ones.

People are also looking for alternative sources of income, because a nine- to- five job is no longer enough to cover their basic needs: food, shelter, and clothing. Take food alone: food inflation has been intense in Nigeria over the past five years, so intense that people who would typically spend 5% to 10% of their income on food are now spending 50% to 60%, and some spend close to a 100%. Consider that the minimum wage is seventy thousand naira. If someone earns a hundred thousand, and there are many people in Nigeria earning that or less, including university graduates, with a spouse and even just one child, feeding three people on a hundred thousand naira is a struggle, no matter where you live, Lagos, Abuja, anywhere. And that’s before factoring in clothing and shelter. Shelter is a completely different challenge; even bankers struggle to afford quality housing in this country, and I say that honestly.

Hence, people are looking for alternative sources of revenue, which pushes them into investments they wouldn’t ordinarily make, chasing quick gains to supplement their income. That means they’re not patient investors, and the capital isn’t patient either.

To answer your question in one sentence: smart money in Nigeria today is really about chasing outsized returns to make up for the shortfall that people’s basic income can no longer cover. Sorry, I took the long way around to answer that. It’s a good question, though.

Dr. Oluwanbepelumi Olanubi: You took us through the reforms, and what’s come out of them, that’s good. I had a conversation earlier this week where the focus was on hustle: how people don’t rely on a single source of income anymore just to sustain a decent livelihood, and how a side hustle isn’t just a reflection of entrepreneurial spirit, but a matter of survival. You touched on that well.

I want to take the conversation deeper into the stock market. The stock market has attracted significant attention, while fixed income instruments continue to offer high yields. What’s driving appetite across these asset classes, beyond the middle class hustle you described? What’s supporting the fundamentals here, for both Nigerian and international investors? Walk us through it.

Robert Omotunde: Yes. I’d always say the equities market is a barometer for the health of an economy. If you look at a country’s stock market, you get a sense of what its economy looks like. The current phase has been very positive, what we’d call a bullish market. It’s been bullish since last year, 2025, into this year. Year to date, the market is up about 52% after the close of June, the midpoint of the year, driven by strong positive sentiment across sectors: oil and gas, banking, industrial goods, telecoms, and consumer goods. Virtually every sector has benefited.

What’s encouraging is that the market is now beginning to price in developments that hadn’t been priced in before. For roughly ten years, the effects of the central bank policies I described earlier weighed on economic growth. Before 2014, this economy could comfortably grow above 6 to 7% even approaching 8%, and the country was targeting double- digit growth. Then, the demand- side currency management, trade restrictions, and border closures all combined to hurt companies. Since the stock market reflects the health of the economy, and the economy wasn’t doing well, the market reflected that too.