Nigeria recorded an astounding $50 billion in cryptocurrency transactions between July 2023 and June 2024, according to Dr. Emomotimi Agama Director-General of the Securities and Exchange Commission (SEC).
This massive volume of digital asset activity, which translates to about N75 trillion, underscores the significant risk appetite of Nigerian investors, a demographic the traditional capital market has largely failed to attract.
The Capital Market Paradox
Speaking at the Chartered Institute of Stockbrokers annual conference, the SEC DG lamented a severe paradox in Nigeria’s financial ecosystem:
- Low Market Participation: Fewer than four per cent of Nigeria’s adult population actively invests in the formal capital market. The total number of registered market participants is under three million.
- High Speculative Engagement: In contrast, over 60 million citizens engage daily in gambling, wagering an estimated $5.5 million every day.
Agama argued that this situation reveals an existing “appetite for risk,” but a profound “erosion of confidence” in the structured financial ecosystem, with speculative culture dominating productive investment.
Challenges and Urgent Reforms
The SEC DG used the impending sunset of the 2015-2025 Capital Market Master Plan (CMMP) as a call for sober reflection. He noted that less than half of the CMMP’s 108 initiatives were fully realised, mainly due to poor strategic alignment and weak monitoring.
- Market Concentration: Liquidity remains narrowly focused on a handful of blue-chip stocks (like Airtel Africa and MTN Nigeria), limiting market depth and discouraging retail engagement.
- National Impact: Nigeria’s market capitalisation-to-GDP ratio stands at just 30 per cent, significantly trailing peers like South Africa, 320 per cent and India 92 per cent. With an annual infrastructure deficit of $\text{\$150}$ billion, the capital market’s contribution remains alarmingly modest.
Agama called for a “reimagined SEC” that acts as an enabler of private-sector-driven growth, urging that if Nigeria can channel even a fraction of its speculative energy into productive investment, the capital market can become the “lifeblood of its economic renaissance.”
