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The Securities and Exchange Commission (SEC) has identified limited investor participation, regulatory challenges, and macroeconomic instability as critical barriers to the capital market’s ability to support Nigeria’s ambition of achieving a $1 trillion economy.
Speaking at the 2024 SEC Journalists Academy in Lagos, SEC’s Director-General, Dr. Emomotimi Agama, represented by Lagos Zonal Director, Mr. John Briggs, emphasized the need to address these challenges to unlock the full potential of the capital market. The event was themed, “The Role of the Capital Market in Driving Nigeria’s One Trillion Dollar Economy.”
Overcoming Key Challenges
Dr. Agama called for a collaborative effort among policymakers, businesses, and journalists to create an enabling environment for market growth. He stressed that journalists play a pivotal role in communicating the capital market’s value to the public, thereby fostering trust and participation.
“Achieving a $1 trillion economy is not merely aspirational but essential for Nigeria’s resilience and prosperity,” he stated. “The capital market, as the backbone of our financial system, is well-positioned to drive this transformation.”
Contributions of the Capital Market
Despite its challenges, the capital market has made significant contributions to Nigeria’s economic development. Dr. Agama highlighted the Federal Government’s use of innovative instruments, such as sovereign bonds and six Sukuk issuances, to fund critical infrastructure projects across the country’s six geopolitical zones.
He also pointed to the introduction of green bonds as a testament to the market’s role in supporting Nigeria’s transition to a low-carbon economy. These initiatives not only address infrastructure needs but also promote environmental sustainability.
Catalysts for Economic Growth
Dr. Agama noted that the capital market has been instrumental in fostering industrial growth, citing the listing of companies such as Dangote Cement and BUA Group, which have contributed to job creation and economic development. He revealed that the total market capitalization of the Nigerian Exchange Limited (NGX) reached N60 trillion as of December 13, 2024, underscoring the private sector’s expanding role in driving economic outcomes.
“One of the capital market’s remarkable attributes is its ability to democratize wealth creation,” Agama stated. “Through instruments like collective investment schemes, retail bonds, and exchange-traded funds, Nigerians across all income levels can access financial opportunities.”
Enabling Private Sector and State-Level Growth
The SEC DG highlighted the private sector’s use of the capital market to raise funds for business expansion and global competition. He cited MTN Nigeria’s 2021 public offering as a prime example of successful local investor engagement.
He also emphasized the market’s value for state governments, mentioning how Lagos and Ogun states have leveraged bond issuances to fund projects in infrastructure, education, and healthcare. “These bonds not only facilitate development but also enforce accountability through market discipline and robust reporting mechanisms,” Agama said.
Leveraging Fintech and Retail Bonds
The introduction of fintech platforms has simplified access to investment opportunities, driving financial literacy and inclusion. The government’s Savings Bond initiative has also expanded the retail investor base, further engaging ordinary Nigerians in economic growth.
Dr. Agama urged stakeholders, including the SEC, market operators, and policymakers, to continue building a capital market that is inclusive, efficient, and globally competitive. He called on journalists to amplify the sector’s successes, fostering greater public confidence and participation.
“The capital market is the engine of economic progress, channeling resources from savers to productive uses,” he concluded. “With concerted efforts, we can position Nigeria’s capital market as a cornerstone for sustainable growth and development.”
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