‘Efficient Capital Market Key To Nigeria’s Economic Transformation’

The chairman, Senate Committee on Capital Market and Institutions, Senator Osita Izunaso has said that a resilient and efficient capital market is indispensable for mobilising long-term finance, promoting private sector growth, and accelerating Nigeria’s national economic transformation.

He stated this in a paper presentation titled, ‘Legislative Leadership and Capital Market Development in Nigeria: Strengthening the Legal Framework for Economic Transformation’ at the 16th fellowship inaugural lecture of the Capital Market Academics of Nigeria (CMAN).

Izunaso argued that while market operators and regulators perform critical operational functions, the effectiveness of every capital market is fundamentally anchored on the quality of its legal and institutional framework.

According to the Senator, the National Assembly has been instrumental in shaping Nigeria’s securities market through law-making, oversight, appropriation, stakeholder engagement, and continuous legal reform.

“The development of an efficient, transparent, and globally competitive capital market is fundamentally dependent on the quality of its legal and institutional framework. While regulators are responsible for day-to-day supervision, the legitimacy of their powers and the confidence of investors are ultimately anchored on legislation enacted by the Legislature,” he stated.

He noted that Nigeria’s aspiration to build a diversified and globally competitive economy depends significantly on the capacity of its capital market to mobilize domestic and international investment for infrastructure, enterprise growth, pension fund investment, and sustainable finance.

The Senator described, “the Investments and Securities Act 2025 as one of the most significant legislative reforms of Nigeria’s financial sector in recent years. It repeals the ISA 2007 and introduces a modern framework that strengthens investor protection, enhances the enforcement powers of the Securities and Exchange Commission (SEC), provides statutory recognition for digital assets and virtual asset service providers, and aligns Nigeria’s regulation with IOSCO principles.”

“The enactment of ISA 2025 demonstrates the responsiveness of the National Assembly to the evolving dynamics of global finance. It provides a legal foundation for financial market infrastructures and stronger mechanisms to combat market abuse,” Izunaso said.

He also examined emerging regulatory issues including financial technology, artificial intelligence, cybersecurity, sustainable finance, and regional market integration, warning that these developments have fundamentally altered securities markets and imposed new demands on lawmakers.

“Digital investment platforms, blockchain, tokenized securities, and virtual assets have expanded access to investment but have also increased exposure to fraud and cybercrime. We need adaptive legislation that balances innovation with effective investor protection,” he said.

He further highlighted persistent challenges such as low retail investor participation, macroeconomic volatility, and the need to deepen the corporate bond, derivatives, and SME financing segments of the market.

Drawing lessons from the United States, India, and South Africa,  Izunaso said successful capital markets are supported by dynamic legislation, strong independent regulators, and continuous legal reviews.

He pointed out that Nigeria’s capital market as a catalyst for growth will require continuous legislative innovation, effective oversight, institutional strengthening, and evidence-based policymaking.

He recommended periodic reviews of the ISA, stronger oversight of the SEC and other market institutions, timely development of subsidiary regulations, and policies to encourage broader domestic participation by women, youths, SMEs, and Nigerians in the diaspora.

“By maintaining this commitment, the National Assembly will not only deepen Nigeria’s capital market but also reinforce its role as a primary channel for mobilizing long-term capital for infrastructure, diversification, and inclusive prosperity,” he added.