Investing Amid Geopolitical Uncertainty: Building a Resilient Portfolio from Nigeria

Question: “From all indications, US and Iran are likely to go into war in weeks. I am an investor in Nigeria, and I have N10 million and $10,000 which I want to invest in the Nigeria and US. Provide a strategy on how I can deploy the funds focusing on public equities, bonds, commercial papers, crypto and treasury bills. Give me specific assets and companies to consider and vehicles I can make this investment.”

My Response as a teacher: “Periods of geopolitical tension often feel distant until markets begin to respond. The possibility of a major conflict, particularly in a region tied closely to energy supply, has consequences that extend far beyond diplomacy. Oil prices react, inflation expectations shift, currencies adjust, and investors around the world quietly reposition capital. For an investor based in Nigeria holding N10 million locally and $10,000 offshore, the key question is not whether such events will affect the portfolio, but how to respond thoughtfully before volatility fully unfolds.

Historically, geopolitical shocks reshape financial markets in predictable ways. Energy prices tend to rise because supply risks increase. Investors seek safety in government-backed securities and high-quality debt instruments. At the same time, equity markets become more selective, rewarding companies with strong cash flow and essential products while punishing speculative ventures. Understanding this pattern helps frame an investment strategy that is not driven by fear, but by structure, balancing protection with selective exposure to sectors that benefit from disruption.

Within Nigeria, the first priority should be stability. Allocating a portion of funds to Treasury Bills provides a dependable base: they offer relatively predictable yields, liquidity, and insulation against sudden equity drawdowns. Complementing this with high-grade commercial papers issued by strong corporates, particularly in banking, telecommunications, and industrial sectors adds income while maintaining credit quality. These instruments perform best when markets grow cautious, because they are tied to businesses that continue operating regardless of global uncertainty.

Equities, however, should not be abandoned; they should be chosen differently. In a world where oil prices may surge, Nigerian energy-linked companies such as Seplat Energy or Oando can benefit directly from stronger crude markets. At the same time, defensive consumer businesses, producers of food, beverages, and everyday goods, provide resilience, as demand for essentials rarely collapses during geopolitical stress.

The $10,000 offshore allocation serves a complementary purpose. Exposure to U.S. Treasury-backed instruments or broad bond ETFs introduces a traditional safe-haven asset that often appreciates when global investors retreat to safety. Select investments in large international energy companies such as ExxonMobil or Chevron provide participation in global oil dynamics, while defense-sector firms whose revenues often rise during heightened geopolitical activity offer an additional, if indirect, hedge against instability. Defensive exchange-traded funds focused on consumer staples can further smooth volatility, representing businesses that continue generating revenue even when markets fluctuate.

Ultimately, the objective is not to predict war or attempt to trade headlines. It is to recognize that global risk reprices markets long before outcomes are certain. A portfolio built around stability, real assets, and cash-flow-generating businesses is better positioned to endure uncertainty and participate in recovery when clarity returns.

In times like these, investing becomes less about chasing growth and more about understanding systems on how energy, capital, and confidence interact. The thoughtful investor does not wait for certainty; he prepares quietly, builds resilience into his allocations, and allows discipline rather than emotion to guide decisions.

For commercial papers in Nigeria, focus on issuers with strong balance sheets and recurring cash flow:

• Tier-1 banks (GTCO, ZenithBank, etc)
• Telecom operators (MTNN, Dangote Cement, etc)

For energy equities in Nigeria, select companies tied to upstream or energy-linked earnings:

• Seplat Energy

• Oando

For defensive stocks in Nigeria, companies selling food and essential goods maintain revenue even during crises:

• BUA Foods

• Nestlé Nigeria

For US, use bond ETFs such as:

• Vanguard Total Bond Market (BND)

• iShares Treasury ETFs

In US energy, focus on large oil companies tend to outperform during supply shocks:

• ExxonMobil

• Chevron

• ConocoPhillips

For the defense stocks, select from the war companies:

• Lockheed Martin

• RTX (Raytheon)

• Northrop Grumman

Consider defensive stocks through consumer Staples Select Sector SPDR (XLP). People must still eat even during war.

If you short, focus on airlines with hubs in UAE, Qatar, etc as most of the hubs will be closed for civilian aviation. And expect Nigerian Naira to appreciate marginally and that means you have an idea how the FOREX market will move.

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