The Securities and Exchange Commission (SEC) has sounded the alarm: fewer than three million Nigerians—roughly four per cent of the adult population—are active investors in the capital market, according to the regulator’s Director-General, Emomotimi Agama.
In a lead paper titled “Evaluating the Nigerian Capital Market Masterplan 2015-2025” presented at the annual conference of the Chartered Institute of Stockbrokers in Abuja, Agama lamented that while capital-market participation remains meagre, more than 60 million Nigerians reportedly engage in daily gambling activities and spend an estimated US$5.5 million each day on such pastimes.
Agama described the situation as paradoxical: “An appetite for risk clearly exists, but not the trust or access to channel that energy into productive investment.”
Highlighting the role of digital assets, he disclosed that over US$50 billion worth of cryptocurrency transactions flowed through Nigeria between July 2023 and June 2024—signalling high risk-tolerance among Nigerians that the formal capital market has not yet captured.
The SEC boss pointed out that Nigeria’s market-capitalisation-to-GDP ratio stands at about 30 per cent—far below those of comparable markets such as South Africa (320 per cent), Malaysia (123 per cent) and India (92 per cent).
He recalled that the ten-year Capital Market Masterplan (CMMP) launched in 2015 was intended to reposition Nigeria’s capital market as the engine of economic transformation by mobilising long-term finance for infrastructure and enterprise development. But as the ten-year milestone approaches, he said, the work is far from done.
Less than half of the 108 initiatives under the CMMP have been fully achieved, he disclosed, citing weaknesses in alignment with national development plans, inadequate tracking metrics and weak stakeholder ownership.
Despite progress in areas such as green bonds, sukuk issuance, fintech integration and non-interest finance, Agama said market liquidity remains concentrated in a few large-cap stocks such as Airtel Africa, Dangote Cement and MTN Nigeria.
Identifying six key challenges for the next phase of reforms, Agama listed: low retail participation; market concentration; falling foreign inflows; under-utilised pension assets; untapped diaspora capital; and a widening infrastructure financing gap.
He pointed out that Nigeria’s annual infrastructure deficit—estimated at US$150 billion—far outpaces the capital market’s contribution, noting that only ₦1.5 trillion has been approved in PPP bonds so far. This, he argued, signals a misalignment between financial innovation and national priorities.
Dr. Agama called for a “reimagined SEC” that operates not only as regulator but also as enabler of private-sector-driven growth. He insisted that the next decade must focus squarely on trust-building, transparency and inclusion. “Vision without execution is inertia — and reform without measurement is aspiration without accountability,” he declared.
He emphasised the need to deepen financial inclusion, boost investor education, broaden access and align capital-market growth with national economic goals. For instance, in recent comments he noted that closing the gender gap in financial inclusion could lift about 700,000 Nigerians out of poverty.
The low level of retail investor participation suggests that the capital market is not yet functioning as a vehicle for broad-based wealth creation and productive investment in Nigeria. With many Nigerians instead turning to gambling or volatile crypto markets, the formal capital market is missing out on a large pool of risk-willing participants.
Because long-term capital is crucial for infrastructure, enterprise development, job creation and economic diversification, the current shortfalls in mobilisation pose a risk to Nigeria’s ambition to build a resilient, high-growth economy.
Outlook
With the CMMP period drawing to a close, the SEC and market stakeholders now face a critical juncture: to assess what has been achieved, identify where the gaps lie and implement the reforms needed to move the market forward. If successful, this could open pathways for greater retail investor engagement, deeper capital mobilisation, more equitable participation and alignment with the country’s broader development priorities.
For now, Dr Agama’s message is clear: the structures are in place, the ambition is recognised—but execution, measurement and trust-building will determine whether Nigeria’s capital market can step up to its full potential in the coming decade.
