Nigeria’s capital market contribution to Gross Domestic Product (GDP) has increased to 33 per cent from 13 per cent in April 2024, reflecting its expanding role in the economy.
The growth follows a 125 per cent increase in market capitalisation, which rose to N123.93 trillion from about N55 trillion.
The Director-General of the Securities and Exchange Commission (SEC), Emomotimi Agama, disclosed the figures in Lagos during his inaugural address to members of the Capital Market Working Group on Market Liquidity at the Commission’s office.
The figures show that the capital market is becoming more important to Nigeria’s economic growth and development.
“Since this administration came into being in April 2024, we have seen market capitalisation grow from about N55 trillion to over N123.93 trillion.
“Our contribution to GDP has moved from 13 per cent to 33 per cent. These are impressive figures, but they tell only part of the story,” he said.
While describing the growth as a reflection of investor confidence and market resilience, the SEC chief cautioned that scale without liquidity could constrain long-term sustainability.
“A capital market is often described as the barometer of an economy’s health. But for that barometer to be accurate, the market must be more than just large—it must be liquid,” Agama said.
He highlighted structural constraints, including high transaction impact costs for institutional investors and the concentration of trading in a narrow band of highly capitalised stocks, leaving the broader market relatively shallow.
He warned that inadequate liquidity could deter participation if investors are uncertain about exiting positions without significant price distortions.
To tackle the challenge, he noted that the SEC has established a multi-stakeholder Working Group comprising exchanges, custodians, fund managers, and dealing members.
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According to Agama, the committee is tasked with recommending reforms to improve trading efficiency, deepen participation and strengthen price discovery.
Its mandate includes reviewing trading and settlement infrastructure, identifying technical and structural bottlenecks affecting transaction speed, and proposing measures to align Nigeria’s settlement cycle with other emerging markets.
He stressed that the SEC is making retail participation also a priority.
He said the Commission is targeting the onboarding of up to 20 million new investors through digital platforms, dematerialisation of share certificates and fintech partnerships.
Agama said product diversification, particularly accelerating derivatives and other asset classes that provide hedging tools, would be critical to deepening liquidity.
He added that the recently enacted Investments and Securities Act (ISA) 2025 has broadened the SEC’s regulatory remit to cover digital assets, creating scope to channel speculative activity into regulated investment vehicles.
Emphasising the sector’s developmental role, Agama said, “The capital market is not gambling; it is the engine of national development. It finances roads, powers factories and creates jobs.”
He urged the Working Group to deliver bold, practical recommendations aligned with the Federal Government’s ambition of building a trillion-dollar economy.
In his remarks, chairman of the Committee and Group CEO of Nigerian Exchange Group (NGX), Temi Popoola, thanked the SEC for the opportunity and assured the DG that the team understands its mandate and will diagnose structural constraints with candour, align on practical reforms, and deliver measurable actions that will deepen liquidity, restore confidence, and strengthen the resilience of our market.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
