Trust Gap, Poor Governance Discouraging Investment In Nigeria – Expert

AVA Capital Plc has identified weak corporate governance and a growing trust deficit as major factors discouraging investment and slowing capital formation in Nigeria, warning that many viable businesses are unable to attract funding because they fail to meet investors’ expectations on transparency and accountability.

Speaking at a media roundtable in Lagos following the company’s listing by introduction on the Nigerian Exchange Limited (NGX), the Managing Director of AVA Capital Plc, Mr. Olukayode Fadahunsi, said restoring investor confidence remains critical to unlocking capital needed to drive economic growth.

According to him, integrity and transparency have become the most valuable assets in today’s investment environment, noting that many investors have become increasingly cautious after suffering losses due to poor corporate governance and inadequate disclosures by companies.

“Trust remains the most valuable asset in the investment business. Once investors lose confidence after losing their capital, rebuilding that relationship becomes extremely difficult,” Fadahunsi said.

He explained that while Nigeria continues to grapple with macroeconomic challenges such as inflation, exchange rate volatility, high interest rates and political uncertainty, the more pressing concern for the capital market is the widening trust gap between businesses and investors.

According to him, several Nigerian businesses possess viable ideas and growth potential but are unable to secure financing because they lack the governance structures and reporting standards required by investors and regulators.

“This has created a situation where capital remains on the sidelines even though the economy urgently requires investment to stimulate growth, create jobs and support business expansion,” he said.

Commenting on AVA Capital’s listing by introduction on the Nigerian Exchange, Fadahunsi said the decision was driven by the company’s commitment to strengthening corporate governance rather than raising fresh capital.

“We will only approach the capital market for fresh funds when there is a genuine business need arising from expansion plans or changes in regulatory capital requirements. Companies should avoid raising capital without clear investment opportunities capable of creating value for shareholders,” he stated.

Also speaking, the Chairman of AVA Capital Plc, Mr. Adeyinka Adedeji, said becoming a publicly quoted company places greater responsibility on the organisation to uphold the highest standards of governance and accountability.

“Becoming a publicly quoted company requires stronger governance, greater accountability, improved transparency and a long-term commitment to creating sustainable value for investors,” Adedeji said.

He noted that the listing reinforces the company’s commitment to international best practices and positions it for long-term sustainable growth.

AVA Capital also unveiled plans to deepen its market presence by expanding its mutual fund offerings from four to 10, increasing its branch network from three to 10 locations nationwide, and leveraging technology to grow its client base from 5,000 to 100,000 by 2030.

The company reported a strong financial performance for the half-year ended June 30, 2026, posting revenue of N33.457 billion, profit after tax of N1.022 billion, and total assets of N110.957 billion.