Nigeria capital market hits N123.9trn

Nigeria’s capital market has recorded a 125 per cent increase in market capitalisation over the past 23 months, rising from about N55 trillion in April 2024 to more than N123.93 trillion, the Securities and Exchange Commission has revealed.

Speaking in Abuja at his inaugural address to the Capital Market Working Group on Market Liquidity, the Commission’s Director-General, Emomotimi Agama, said the market’s contribution to Nigeria’s Gross Domestic Product had also expanded significantly — from 13 per cent to 33 per cent — reflecting its growing importance to the economy.

Agama noted that although the growth figures were impressive, market size alone was not enough without improved liquidity and depth. He warned that investors could be discouraged if exit opportunities remain uncertain or if prices are easily distorted.

He identified persistent challenges, including high transaction impact costs for institutional investors and a concentration of trading in a small number of highly capitalised stocks, which leaves the broader market relatively shallow.

To tackle these issues, the SEC inaugurated a multi-stakeholder Working Group made up of exchanges, custodians, fund managers and other market operators. The group will focus on enhancing trading efficiency, expanding participation and improving price discovery.

Part of its mandate includes reviewing trading and settlement infrastructure, identifying bottlenecks affecting transaction speed and recommending measures to make Nigeria’s settlement cycle more competitive with other emerging markets.

The Commission also plans to widen retail investor participation by targeting up to 20 million new investors through digital platforms, dematerialisation of share certificates and fintech partnerships. Product innovation — including faster development of derivatives and other asset classes — is expected to play a key role in improving liquidity.

Agama further highlighted the recently enacted Investments and Securities Act, which broadens the SEC’s oversight to include digital assets, creating pathways to channel speculative interest into regulated investment products.

Meanwhile, Chairman of the Working Group and Group Chief Executive Officer of Nigerian Exchange Group, Temi Popoola, praised the initiative. He said the committee would identify structural constraints and produce practical recommendations to strengthen liquidity, rebuild investor confidence and boost market resilience.

Agama concluded that while recent growth is encouraging, the next phase of reforms will prioritise building a deeper, more inclusive and globally competitive capital market capable of supporting the Federal Government’s goal of achieving a trillion-dollar economy.