In every market cycle, there are voices of caution — some rooted in wisdom, others shaped by past losses and fear. While history offers valuable lessons, it should guide us, not paralyze us. A recent comment circulating on Nigerian investment discussions reflects this sentiment and deserves a thoughtful, data-informed response.
Here is the original Facebook post by my friend, Dr. Usman Isyaku:
“I read so many people encouraging others to buy Nigerian stocks now. You don't buy anything when people are talking about it. It signals the market top. Buy now and lose your money. We are back in 2007–2008 era once again. I was smart enough to resist buying booming banks and telecoms shares that collapsed with my colleagues' money. 2–3x isn't worth the risk. Be careful!”
While caution is healthy in investing, broad conclusions based solely on past market crashes can be misleading. The Nigerian stock market of today is not the same market of 2007–2008, and history itself shows that popular markets do not always signal a top.
Let’s examine this claim through multiple real-world scenarios and today’s market realities to separate fear from facts using concrete NGX (Nigerian Exchange Group, formerly Nigerian Stock Exchange – NSE) examples.
1. When “Everyone Was Talking” — Yet Prices Still Rose
In 2020 and 2021, after the COVID-19 crash, Nigerian stocks became widely discussed again. Many investors were skeptical, claiming the rebound was just hype.
Yet, companies like:
• BUA Foods (1,700%+ gains, 2022-2026)
• Jaiz Bank (1,000%+ gains, 2021-2026)
• Geregu Power (1,000%+ gains, 2022-2026)
• Presco (2,100%+ gains, 2021-2026)
• Okomu Oil (1,100%+ gains, 2021-2026)
• Seplat Energy (1,100%+ gains, 2021-2026)
went on to record massive multi-year gains, in some cases exceeding 2,000% in just 5 years. These were not speculative bubbles — they were driven by:
• Strong earnings
• FX revaluation benefits
• Real business expansion
• Rising consumer demand
Popularity did not mean the market was at its peak.
Fundamentals did.
2. 2–3x Returns Are Not “Small” in Real Life
Calling a 2–3x return “not worth the risk” ignores the reality of wealth building.
For example:
• Dangote Cement (pays final dividends only per year)
• Seplat Energy (pays quarterly dividends, 4 times per year)
• GTCO - GTBank (pays interim and final dividends, i.e., twice per year)
• Zenith Bank (pays interim and final dividends, i.e., twice per year)
have delivered solid capital appreciation (at least 100% returns in the last 5 years) plus consistent dividend payouts over the years. For long-term investors, this means:
• Compounding growth
• Regular income
• Lower volatility than crypto
• Better inflation protection
Wealth is not built only by chasing “10x”.
It is built on repeatable, sustainable gains.
3. 2007–2008 Was a Different Market Structure
The 2007–2008 crash was fueled by:
• Heavy margin lending
• Weak regulation
• Excessive speculation
• Poor corporate governance
Today’s NGX has:
• Stronger regulation
• Better disclosure standards
• Less leverage
• More institutional participation
Companies like MTN Nigeria, Airtel Africa, Seplat Energy, and BUA Cement operate under stricter financial reporting and governance frameworks.
The risks still exist —
But the structure is not the same.
4. The 2007 Stock Market Bubble
From 2005 - 2007, Nigeria experienced:
• Banking sector consolidation
• Easy access to credit
• Massive public interest in stocks
• Aggressive margin lending by banks
Stock prices rose far beyond the real value of companies.
People were:
• Borrowing money to buy shares
• Using shares as collateral to borrow more
• Chasing quick profits without understanding fundamentals
This created a speculative bubble.
Weak Regulation and Poor Risk Management
At the time:
• Risk controls were weak
• Corporate governance was poor
• Financial disclosures were limited
• Insider trading was common
Many investors didn’t know:
• The true financial health of companies
• How risky the market had become
The system lacked transparency.
The Global Financial Crisis (2008)
The U.S. financial crash spread worldwide.
Foreign investors:
• Pulled money out of emerging markets
• Sold Nigerian stocks
• Reduced liquidity
This added external pressure to an already fragile market.
Banking Sector Crisis (2009)
In 2009, the Central Bank of Nigeria (CBN) discovered:
• Massive non-performing loans
• Poor corporate governance
• Excessive exposure to stock market loans
Several bank CEOs were removed.
Some banks collapsed or were rescued.
Confidence in the financial system dropped sharply.
Why Many Investors Lost Money
People lost money because:
• They bought at extremely inflated prices
• They leveraged, i.e., used borrowed money
• They panicked and sold at the bottom
• They didn’t diversify
• They chased hype, not fundamentals
Many never recovered because they:
• Exited the market completely
• Never benefited from later recoveries
Key Lesson from 2007–2009
The crash was not caused by:
❌ Investing in stocks
❌ The NGX itself
It was caused by:
✔ Excessive borrowing
✔ Weak regulation
✔ Herd mentality
✔ Poor risk control
✔ Speculation without fundamentals
The lesson is not:
“Never invest again.”
The lesson is:
Invest wisely. Avoid leverage. Focus on fundamentals. Diversify.
Markets recover.
Good companies grow.
Informed investors win over time.
5. Market Timing Often Costs More Than It Saves
Many investors waited for another “big crash” after 2020. While they waited, stocks like:
• Geregu Power (IPO at ₦100, later over ₦1,000)
• BUA Foods
• Presco
• Okomu Oil
multiplied in value.
Waiting for the “perfect moment” often leads to missed opportunities. One should understand that whenever the overall market performance is appreciating or bullish, i.e, NGX all-share-index (NGXASI) increasing, you would still find out that some company stocks are depreciating. Conversely, whenever the NGXASI is negative or bearish, some stocks would still be surging or remain completely unaffected by the overall market downward performance.
What this means is that the market rewards:
• Patience
• Staying well-informed
• Fundamentals
• Consistency
Not fear-based decisions.
6. Popularity vs Fundamentals
Yes, blind hype can be dangerous.
But informed participation is not the same as speculation.
When people talk about:
• Strong earnings
• Dividend growth
• FX-driven revenue gains
• Expansion projects
• Consistent historical capital gains
That is not hype —
That is fundamental investing.
7. Strong Market Growth Projections in 2026
Economists, like Birmarch Rewane, forecast significant expansion in the NGX market capitalization, with estimates suggesting it could grow from the current ₦106 trillion to about ₦262 trillion by the end of 2026, driven by:
• new major listings (Dangote Oil Refinery, NNPCL, Dangote Fertilizer Refinery, etc.)
• improved corporate earnings
• structural reforms
• broader institutional participation
This implies potential broad-market gains if fundamentals continue to improve.
Anyone who trades in stocks - traders and long-term investors – would confirm that market growth has already started in just 15 market days in 2026, given the year-to-date (YtD) % returns of some stocks. Can you imagine the capital gains to be accrued for someone who invests, say, ₦100,000 in each of these stocks from the beginning of this year alone?
• JAIZ BANK – 80% (Gains = ₦80,000)
• DEAPCAP – 135% (Gains = ₦135,000)
• MAY & BAKER – 74% (Gains = ₦74,000)
• MULTIVERSE MINING & EXPLORATION – 112% (Gains = ₦112,000)
• NCR – 77% (1,300%+, in 2025) (Gains = ₦77,000)
• NEIMETH INTERNATIONAL PHARMACEUTICALS – 74% (Gains = ₦74,000)
• SCOA – 110% (Gains = ₦110,000)
• RED STAR EXPRESS – 52% (Gains = ₦52,000)
• OMATEK VENTURES – 57%, (Gains = ₦57,000)
• MECURE INDUSTRIES – 50%, (Gains = ₦50,000)
• EUNISELL INTERLINKED– 36% (Gains = ₦36,000)
• FIDSON HEALTHCARE – 40% (Gains = ₦40,000)
• ETRANZACT INTERNATIONAL – 62% (Gains = ₦62,000)
• LOTUS HALAL EQUITY ETF – 26% (Gains = ₦26,000)
• MCNICHOLS – 84% (Gains = ₦84,000)
You cannot realize such gains without patience, staying well-informed, being consistent, and investing fundamentally. I first bought
• Jaiz Bank shares in 2024 at ₦2.14, closed today at ₦8.19 (283%)
• FIDSON in November last year at ₦36, closed today at ₦70 (94%), with right issue going for ₦35, i.e., 100% instant return
• NCR in October 2025 at ₦18, closed today at ₦129 (614%)
• BUAFOODS in 2024 at ₦347, closed today at ₦799 (130%)
• MTN in 2024 at ₦200, closed today at ₦580 (190%)
• EUNISELL in November, 2025, at ₦60, closed today at ₦157 (161%)
• SEPLAT in 2024, at ₦3416, closed today at ₦6,700 (96%)
• SCOA in December last year at ₦7.33, closed today at ₦14.9 (103%)
With the right diversification, positioning, and patience, the stock market – especially NGX - is one of the best passive wealth-creating machines.
Study it. Embrace it.
Final Thought
Every market cycle has:
• Winners
• Losers
• Skeptics
• Opportunists
Those who succeed are not the ones who avoid the market forever,
but those who understand it, respect risk, and act with discipline.
History should educate, not intimidate.
The lesson from 2008 is not “never invest again.”
The lesson is:
Invest smarter. Diversify. Focus on fundamentals.
The Nigerian stock market is not perfect. Two mortgage banks went under last year - Asosavings & Loans and Union Homes - NDIC has started the process of liquidating their assets to pay depositors and shareholders.
But it remains a powerful tool for long-term wealth creation for those who approach it with knowledge, patience, and discipline.
Fear protects you from losses —
But knowledge positions you for gains.
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