Nigeria Aims to Boost Capital Market with New Listing Rules

BusinessDay Nigeria reports that Nigeria is working to draw in more African firms and investors into its capital market by implementing a new depositary-receipt system and offering listing benefits, with the goal of tripling the size of its market within the next ten years.

The Securities and Exchange Commission (SEC) is set to launch an African depositary-receipt framework to support cross-border listings, expedite approval processes and lower obstacles for businesses aiming to secure funding in Nigeria and other African markets.

This initiative is a key component of the regulator’s 10-year capital market development strategy, announced on Monday, which seeks to expand the market to N750 trillion ($562 billion) and boost annual diaspora investments to $10 billion. As part of the proposed framework, the SEC aims to implement faster approval procedures, initial listing-fee discounts, cross-border settlement and custody connections, and tax neutrality to foster participation across African markets.

The regulator also plans to create guidelines for foreign entities looking to list in Nigeria and increase opportunities for Nigerian companies to list in other African markets. This move may broaden the range of companies accessible to Nigerian investors and provide local firms with more avenues to secure funding.

The effectiveness of these measures will hinge on their ability to position Nigeria as a viable alternative to other African markets in terms of liquidity, transaction expenses and investor trust. The Dangote Petroleum Refinery & Petrochemicals FZE, Africa’s largest industrial facility, is leveraging global depositary receipts to promote its initial public offering to a broader African investor audience.