Nigeria's New Era: Navigating Geopolitical Risks and Opportunities in a Post-Buhari Economy

Nigeria's transition from the Muhammadu Buhari era to the presidency of Bola Tinubu in 2023 has ushered in a pivotal moment for Africa's largest economy. While Buhari's tenure is remembered for its anti-corruption push, partial containment of Boko Haram, and struggles with economic instability—including currency volatility and energy subsidies—Tinubu's reforms are now reshaping the landscape. For investors, the question is clear: How does this political shift translate into risks and opportunities for Nigerian equities and commodities?

Geopolitical Risks: Legacy of Instability vs. Structural Reforms

Buhari's era left Nigeria grappling with a precarious fiscal balance, high inflation, and reliance on oil exports. His anti-corruption drive, though well-intentioned, often clashed with political realities, while his failure to fully resolve security issues in the Niger Delta—where militant attacks regularly disrupted oil production—left scars. Tinubu's bold moves, including the removal of fuel subsidies and Naira floatation, have addressed these legacy issues head-on.

The subsidy removal, while sparking protests and a brief spike in inflation, has eliminated a $20 billion annual drain on public finances. Meanwhile, the Naira's float has aligned Nigeria's currency with market realities, reducing black-market distortions.

Yet risks remain. The cost-of-living crisis persists, with inflation only recently easing to 21% in 2025 from peaks above 24%. Protests over fuel prices in 2023-2024 highlighted public frustration, underscoring the political tightrope Tinubu must walk. For investors, this volatility could pressure equities tied to consumer-facing sectors.

Opportunities: Energy Reforms and the $8 Billion Gamble

The oil and gas sector is the linchpin of Nigeria's economy, and Tinubu's reforms have repositioned it as a magnet for foreign capital. Executive Orders on Oil & Gas Reforms (2024) streamlined contracts, reduced regulatory hurdles, and slashed upstream project costs by 40%. The result? A surge in FDI, with majors like ExxonMobil, Shell, and Chevron committing over $8 billion to deepwater projects by 2025.

The Dangote Refinery's 2025 launch—processing 650,000 barrels daily—could slash Nigeria's $17 billion annual gasoline import bill, while the NLNG Train 7 and Ajaokuta-Kaduna-Kano gas pipeline projects signal progress toward energy self-sufficiency. For investors, this bodes well for equities in the Nigerian National Petroleum Corporation (NNPC) and contractors like Julius Berger Nigeria, while crude oil prices above $80/barrel could amplify returns.

Security and Stability: The Niger Delta Wild Card

Security in the Niger Delta—a historic flashpoint for militant attacks—has improved, thanks to Tinubu's emphasis on dialogue over force. This stability has unlocked production gains, with output rising from 1.1 million to 1.8 million barrels per day since 2023. However, lingering threats to pipelines and terminals remain a geopolitical wildcard. Investors in oil equities should monitor attacks via platforms like the Nigerian Extractive Industries Transparency Initiative (NEITI).

Investment Implications: Short-Term Volatility, Long-Term Value

Nigeria's story is one of trade-offs. Short-term risks—political protests, inflation, and currency swings—could pressure equities like the Nigerian Stock Exchange All Share Index (). Yet the long-term picture is compelling: fiscal discipline has boosted external reserves to $23 billion, debt-to-GDP ratios have stabilized, and growth has rebounded to 4.6% in late 2024.

For investors, the calculus hinges on patience. Overweight exposure to energy equities (e.g., TotalEnergies' Nigerian assets, Shell's ventures) and commodities tied to oil/gas infrastructure could yield outsized gains as reforms bear fruit. Meanwhile, infrastructure plays—such as power generation firms and construction stocks—benefit from Tinubu's push to diversify the economy.

Final Take: Nigeria's Transition is a Structural Bet

Nigeria's post-Buhari era is a testament to the power of hard choices. Tinubu's reforms, though disruptive, are laying the groundwork for a more sustainable, diversified economy. While geopolitical risks persist, the structural tailwinds—rising oil production, improved governance, and energy self-sufficiency—make Nigerian assets a compelling long-term bet. Investors who can stomach short-term turbulence may find themselves positioned to capitalize on Africa's next growth story.

Investment thesis: Hold or increase exposure to Nigerian energy equities and infrastructure plays, with a focus on companies benefiting from deepwater projects and gas monetization. Monitor security developments and inflation trends closely.