Nigeria’s capital market contribution to Gross Domestic Product (GDP) has risen to 33 per cent, with total market capitalisation climbing to over N123.93 trillion from about N55 trillion in April 2024, a 125 per cent increase, according to the Securities and Exchange Commission (SEC).
Emomotimi Agama, SEC Director-General, disclosed the figures during his inaugural address to members of the Capital Market Working Group on Market Liquidity in Lagos on Sunday.
Agama described the expansion as historic, noting that the market’s share of GDP has more than doubled from 13 per cent to 33 per cent since April 2024.
However, he cautioned that headline growth alone does not guarantee market health.
“A capital market must be more than just large, it must be liquid,” he said, stressing that liquidity is essential for investor confidence, efficient trading, and long-term stability.
He added that the capital market plays a central role in national development by financing infrastructure, industry, and job creation.
Despite the sharp rise in market value, the SEC identified several structural weaknesses:
- Trading remains concentrated in a few highly capitalised stocks.
- Many listed equities are relatively illiquid.
- High transaction impact costs affect institutional investors.
- Limited depth may discourage participation if investors fear difficulty exiting positions.
Agama noted that a functional market must allow seamless entry and exit without significant price distortions.
To address these challenges, the SEC has inaugurated a multi-stakeholder Working Group comprising exchanges, custodians, fund managers, and dealing members.
The group is mandated to:
- Review trading and settlement infrastructure
- Improve price discovery and reduce transaction costs
- Enhance settlement cycle competitiveness
- Deepen liquidity across asset classes
The SEC also aims to onboard up to 20 million new retail investors through digital platforms, dematerialisation of share certificates, and fintech partnerships.
Product innovation, including derivatives, has been identified as key to expanding hedging tools and boosting market activity.
Agama further noted that the recently enacted Investments and Securities Act 2025 broadens regulatory oversight to include digital assets, potentially channelling speculative flows into regulated investment vehicles.
The SEC says its 2026 reform agenda is focused on translating recent capitalisation gains into sustainable and inclusive growth.
As Nigeria pursues its ambition of building a trillion-dollar economy, regulators maintain that the next phase of reform must ensure the capital market is not only bigger — but deeper, more efficient, and globally competitive.
