Capital Market GDP Contribution Hits 33% After N68trn Gain – SEC

The Nigerian capital market’s contribution to the nation’s Gross Domestic Product (GDP) has risen to 33 per cent from 13 per cent following a N68.93 trillion increase in market capitalisation since April 2024.

The Director-General of the Securities and Exchange Commission (SEC), Dr Emomotimi Agama, disclosed this during his inaugural address to the newly launched Capital Market Working Group on Market Liquidity, noting that market capitalisation has more than doubled from about N55 trillion to over N123.93 trillion within the period.

According to Dr Agama, the market has recorded a remarkable 125 per cent growth, representing a N68.93 trillion increase in capitalisation since April 2024. He described the figures as evidence of strong investor confidence and the resilience of the Nigerian capital market under the current administration, but cautioned that size alone is insufficient without corresponding market depth and liquidity.

“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.

Agama emphasised that liquidity remains critical to sustaining growth momentum, noting that a market must be deep and efficient to perform its primary function of capital formation effectively. He stated that 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.

He identified key structural challenges, including high transaction impact costs for institutional investors and the concentration of trading activity in a limited number of highly capitalised stocks, which leaves the broader market relatively shallow. He warned that without sufficient liquidity, investors may be reluctant to enter the market if they are uncertain about their ability to exit positions without significant price distortions.

To address these concerns, the SEC inaugurated a multi-stakeholder Working Group comprising exchanges, custodians, fund managers, dealing members and other market operators. The group is expected to develop practical recommendations to improve trading efficiency, deepen participation and enhance price discovery. It is also mandated to recommend measures to broaden retail participation, with the SEC targeting the onboarding of up to 20 million new investors through digital platforms, dematerialisation of share certificates and fintech partnerships.

Agama noted that product innovation would also be central to improving liquidity, particularly through the accelerated development of derivatives and other asset classes that provide hedging opportunities and stimulate market activity. He added that the recently enacted Investments and Securities Act (ISA) 2025 has expanded the Commission’s regulatory oversight to include digital assets, creating an opportunity to channel speculative interest into regulated and productive investment channels.

He urged members of the Working Group to produce bold and practical recommendations capable of strengthening liquidity and supporting the Federal Government’s broader ambition of building a trillion-dollar economy.

The Chairman of the Committee and Group Chief Executive Officer of NGX, Mr Temi Popoola, commended the SEC for the initiative and assured 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 the market.

Nigeria’s capital market has continued its upward trajectory since January 2026, sustaining momentum from late 2025 amid regulatory reforms and improving macroeconomic stability.

Market capitalisation rose from N150.9 trillion at the end of 2025 to N217.7 trillion by mid-January 2026, with equities accounting for N166.13 trillion. The All-Share Index (ASI) climbed above 165,000 points, supported by strong activity in the banking and industrial sectors.

In the first trading week of February (30 January to 5 February), market capitalisation advanced by N4.08 trillion, while the ASI rose to 171,727 points, representing a year-to-date gain of 10.4 per cent. Key sectoral performances included Oil and Gas at 10.9 per cent, Industrials at 4.4 per cent and Banking at 3.6 per cent, alongside a 53.5 per cent rise in trading volume.

Analysts attribute the sustained gains to the SEC’s updated capital requirements for market operators, product innovations such as derivatives, expanded retail investor participation initiatives, improved corporate earnings and renewed foreign portfolio inflows.

Market observers note that these developments position the capital market for measured and sustainable growth, provided liquidity challenges are effectively addressed.