The Securities and Exchange Commission (SEC) has established a cross-sector working group made up of stock exchanges, custodians, asset managers, brokers, and other capital market operators to tackle structural weaknesses limiting market depth. Key concerns include elevated transaction costs for institutional investors and the dominance of trading activity in a small number of large-cap stocks, factors that have left the wider market relatively shallow
The initiative comes amid a sharp expansion in the Nigerian capital market. Since April 2024, total market capitalization has climbed by 125%, rising from approximately ₦55 trillion to more than ₦123.93 trillion. During the same period, the market’s share of Nigeria’s Gross Domestic Product increased from 13% to 33%—an expansion valued at ₦68.83 trillion.
Speaking at the inauguration of the Capital Market Working Group on Market Liquidity in Lagos, SEC Director-General Emomotimi Agama described the growth as evidence of investor confidence and the market’s resilience. However, he stressed that size alone is not sufficient; sustainable progress depends on strong liquidity and depth. According to him, a well-functioning capital market must enable efficient capital formation and provide investors with the ability to enter and exit positions without triggering major price disruptions. The newly formed group has been tasked with proposing practical reforms to enhance trading efficiency, broaden market participation, and strengthen price discovery mechanisms. Its responsibilities include reviewing trading and settlement systems, identifying operational and structural constraints that slow transactions and recommending improvements that would align Nigeria’s settlement cycle more closely with standards in comparable emerging markets.
In addition, SEC plans to expand retail investor participation significantly. Through digital onboarding platforms, the dematerialization of physical share certificates, and collaborations with fintech firms, the capital market regulator aims to attract as many as 20 million new investors into the market
