Paragraph 1: The Nigerian Government’s Commitment to Capital Market Development
The Federal Government of Nigeria has reaffirmed its dedication to bolstering the nation’s capital market. This commitment is centered on encouraging significant state-owned and private enterprises, notably the Nigerian National Petroleum Company Limited (NNPC) and Dangote Petroleum Refinery, to list their shares on the Nigerian Exchange (NGX). This strategic move aims to enhance investor participation, inject much-needed liquidity into the market, and ultimately drive economic growth. The Vice President, Kashim Shettima, emphasized the pivotal role of a robust capital market in achieving economic stability and propelling Nigeria towards its ambitious goal of a $1 trillion economy. This vision underscores the belief that a thriving capital market is not just a platform for financial transactions, but a vital engine for national development.
Paragraph 2: Positive Indicators and Growth Potential of the Nigerian Capital Market
Despite both global and domestic economic headwinds, the Nigerian capital market has demonstrated remarkable resilience and growth. In January 2025 alone, the market capitalization of the NGX surged by N1.95 trillion, reflecting growing investor confidence in Nigeria’s economic trajectory. This impressive figure underscores the effectiveness of the ongoing reforms and policies implemented by the government. Compared to January 2024, the market witnessed an even more substantial increase of N14.44 trillion. These positive indicators, according to the Vice President, are a testament to the steady hand guiding the economy under President Bola Tinubu. Furthermore, the market’s robust performance in 2023, with a 37% surge, followed by a 1.5% increase in early 2024, reinforces its position as a pillar of economic resilience.
Paragraph 3: Strategic Initiatives and Reforms to Strengthen the Capital Market
The Federal Government is actively pursuing a multi-pronged approach to strengthen the capital market and attract both local and international investors. Key amongst these initiatives is the implementation of the revised Capital Market Master Plan. The Securities and Exchange Commission (SEC) has allocated a substantial N51.49 billion in its 2025 budget to support key initiatives aimed at broadening market participation and boosting investor confidence. These initiatives encompass enhanced regulatory oversight, the integration of advanced technology, and the introduction of innovative financial products. The ongoing banking sector recapitalization is another crucial driver of investor sentiment, as evidenced by the 9.76% year-to-date rise in the NGX Banking Index.
Paragraph 4: Leveraging Public Assets and Expanding Investment Opportunities
Further bolstering the capital market’s growth are Nigeria’s pension fund assets, which reached an unprecedented N20.5 trillion as of December 2024, and the exceeding of federal revenue collection targets, reaching N27 billion. This represents both a 120% achievement of projected targets and a significant 70% increase from 2023 figures. This success is attributed to President Tinubu’s pro-business policies, fiscal discipline, and investment-friendly reforms. The government is also exploring innovative financing mechanisms, including Sovereign Sukuk bonds, which raised N1.1 trillion to fund 124 federal road projects across the country. Agreements with the International Finance Corporation are also in place to expand electricity access to 400,000 Nigerians, addressing critical infrastructure bottlenecks that hinder economic progress.
Paragraph 5: Expert Recommendations and the IPO Approach
Professor Uche Uwaleke, a renowned expert in capital markets, has advocated for a strategic approach centered on Incentives, Privatization, and Optimization (IPO) to revitalize the capital market. He urges the government to sell stakes in state-owned enterprises through the NGX as a means of attracting long-term capital for national development. He proposes the creation of a Special Purpose Vehicle (SPV) for public investment in the oil and gas sector, which could then be listed on the NGX to attract both domestic and international investors. Professor Uwaleke also recommends tax incentives for newly listed companies and suggests that universities could leverage the capital market by issuing bonds to fund research and infrastructure projects.
Paragraph 6: Optimizing Public Assets and Expanding Market Participation
Professor Uwaleke’s recommendations also encompass the optimization of public assets through infrastructure bonds, including Sukuk and Green Bonds, to finance sustainable development projects. He proposes the securitization of public infrastructure, suggesting that the government issue securities backed by revenue streams from toll roads and utility payments. He also encourages the promotion of Real Estate Investment Trusts (REITs) to unlock capital for housing development, alongside developing a robust secondary mortgage market. These strategies, coupled with the anticipated listings of major players like NNPC, Dangote Refinery, and Nigeria LNG, are expected to significantly deepen the capital market, enhance liquidity, and attract global investors, ultimately driving Nigeria towards its economic goals. The successful issuance of Eurobonds without a roadshow further underscores growing global confidence in Nigeria’s economic stability, signaling a positive outlook for the future.
