The capital market is often described as the gauge of any economy.
It reflects the health of businesses, the investment climate, and the confidence of both local and international investors.
In Nigeria, the capital market has grown to become not only a platform for raising funds but a critical vehicle for economic transformation, supporting industrialization, wealth creation, innovation, and infrastructure development.
As Nigeria continues its journey toward economic diversification and transformation, the capital market remains a central player connecting the dots between savings and investment, policy and prosperity, vision and value.
Through this evolution, key stakeholders have played indispensable roles in driving the market forward, and the upcoming Nairametrics Capital Market Choice Awards seeks to recognize and honor these contributions.
The awards will celebrate the outstanding efforts of operators, regulators, investors, and other market participants whose work has fostered confidence, market efficiency, and financial deepening in Nigeria.
The Evolution
The Nigerian capital market has grown from modest roots into a vital engine of national development. Beginning in 1946 with the issuance of the first development bond, this laid the foundation for long-term capital formation.
The establishment of the Central Bank of Nigeria (CBN) in 1958 further solidified the framework for financial regulation, followed by the creation of the Lagos Stock Exchange in 1960, which evolved into the Nigerian Stock Exchange (NSE) in 1977.
A significant legislation that affected the NSE was the 1972 Indigenization Policy, introduced through the Nigerian Enterprises Promotion Decrees (NEPC). The law aimed to transfer ownership of foreign-owned firms operating in Nigeria to Nigerians, with banks, for instance, required to have 60% local equity.
While the policy had both positives and negatives, it significantly expanded the market: from just six companies listed between 1960 and 1969, eighty-four firms were listed between 1970 and 1979, particularly in consumer goods, industrial sectors, and healthcare.
The 1980s and 1990s saw increased listings. Notable companies listed during this period and still on NGX include Cutix Plc, Coronation Insurance Plc, Eunisell Interlinked Plc, NEM Insurance Plc, etc. These listings marked a significant shift towards greater private sector involvement and local ownership, further expanding the depth and diversity of the market.
From 1999 to 2004, market liberalization and banking reforms sparked explosive growth, followed by reforms post-2008/2009 global financial crisis, which strengthened regulatory oversight.
- Key actions during this period included the deregulation of interest rates and privatization of state-owned enterprises, which resulted in the listing of several state-owned companies on the Nigerian Stock Exchange (NSE).
- The Central Bank of Nigeria (CBN) also introduced reforms aimed at improving banking sector stability, including a bank consolidation program that led to the merger of smaller banks into larger, more robust institutions. This fostered confidence and increased activity in the capital market.
During this period, the market saw a surge in both foreign and local investments, with the introduction of new financial products, initial public offerings (IPOs), and bond listings, including some of the largest IPOs in Nigerian history.
Post-2010, the Nigerian capital market witnessed landmark listings such as MTN Nigeria (2019) and BUA Foods (2022), which significantly boosted market depth and diversification. MTN’s IPO raised about N200 billion, attracting global investor interest and increasing retail participation.
BUA Foods’ listing further strengthened the market, adding a major player in the consumer goods sector.
Current Status
More recently, companies like Transcorp Power, Aradel Holdings, Halden McCall Real Estate Investment Trust, and Geregu Power Plc have joined the Nigerian Exchange (NGX), expanding the market’s sectoral representation, especially in power, energy, and real estate, and enhancing its appeal to institutional and retail investors alike.
In 2024, the domestic capital market recorded notable growth, with the equities market rising by 37.65% and the debt market by 68.31%.
Amid rising inflation, exchange rate volatility, and fresh regulatory directives, particularly the CBN’s recapitalisation mandate, Nigeria’s capital market has proven its capacity to mobilize long-term capital.
And now, as of mid-2025, Nigerian banks have raised over N2.4 trillion through the market to strengthen their capital base. According to SEC DG, Dr. Emomotimi Agama, this highlights the depth and resilience of the capital market as a strategic enabler of financial stability and sector-wide transformation.
Today, the Nigerian capital market stands transformed, dynamic, digital, and diversified. From a single exchange with manual trading to a multi-platform system enabling equity, debt, and alternative assets, it remains a critical catalyst for Nigeria’s economic transformation.
Bridging the Gaps
While Nigeria’s capital market has grown in resilience and innovation, certain structural gaps still limit its full potential.
Compared to more developed emerging markets, seamless movement of trading accounts across platforms remains a challenge, often constrained by legacy systems and coordination issues between market operators.
Derivative products, though introduced, have yet to gain significant traction due to limited market education, regulatory clarity, and investor appetite. Peer markets have developed more robust derivative ecosystems, supporting hedging, liquidity, and portfolio diversification.
While retail access continues to improve through digital tools, onboarding processes and investor portability still need further enhancement. Similarly, governance and ESG frameworks are evolving, but standardization and compliance are areas requiring attention.
These gaps are not insurmountable, and with ongoing reforms, technological investments, and a commitment to collaboration across stakeholders, the Nigerian capital market is well-positioned for the next phase of growth.
The recognition and celebration of these efforts, such as through the Nairametrics Capital Market Choice Awards (NCMA), play a vital role in incentivizing progress and ensuring that the market continues to evolve in a way that meets global standards and attracts both domestic and international investment.
