Commodities - Nigeria

Nigeria

The nominal value in the Commodities market is projected to reach US$254.90bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 2.50% resulting in a projected total amount of US$288.40bn by 2029.
The average price per contract in the Commodities market amounts to US$0.02 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (US$53,690.00bn in 2024).
In the Commodities market, the number of contracts is expected to amount to 16.39m by 2029.

Market

Region

Region comparison

Currency

Analyst Opinion

The Commodities market in Nigeria has been experiencing significant growth and development in recent years. Customer preferences in the Nigerian Commodities market are shifting towards more diverse investment options, with investors showing increased interest in financial derivatives such as commodity futures and options.

This trend is driven by a growing awareness of the potential for higher returns and portfolio diversification offered by these instruments. Trends in the market indicate a gradual but steady increase in trading volumes and liquidity for various commodities derivatives in Nigeria. This trend is influenced by the introduction of new products and trading platforms, as well as improvements in market infrastructure and regulatory frameworks.

Additionally, the integration of technology in trading processes has made it easier for investors to participate in the market. Local special circumstances, such as the country's reliance on commodity exports and fluctuations in global commodity prices, play a significant role in shaping the Commodities market in Nigeria. The economy's exposure to external factors and the need to manage price risks have driven the demand for commodities derivatives as a risk management tool among local businesses and investors.

Underlying macroeconomic factors, including inflation rates, foreign exchange dynamics, and government policies, also impact the development of the Commodities market in Nigeria. As investors seek ways to hedge against inflation and currency risks, commodities derivatives have become an attractive option for managing these exposures in the market. Overall, the Commodities market in Nigeria is poised for further growth and evolution as market participants continue to embrace financial derivatives as essential tools for investment and risk management in the country's dynamic economic landscape.

Methodology

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.