SEC and its 10-year master plan for NGX

Spread the word The Nigerian capital market, personified by the Nigerian exchange Group (NGX), is a colossal success story.  Both domestic retail investors and foreign portfolio investors are now struggling to invest in the NGX because it is one of the most profitable capital markets in the world. The NGX has been a struggling market for 63 years since it was founded in 1960 as the Nigerian Stock Exchange (NSE).  It, however, made a breakthrough in 2025. That year, the market capitalisation of the Nigerian capital market (the monetary value of all shares listed in the market) crossed the N40 trillion target.  It was a scant N23 trillion in 2023. The expansion was celebrated by many as a landmark success.

No one could dare to predict what the future holds for the Nigerian capital market. Then the Federal Government of Nigeria initiated daring economic reforms in 2023.The teething problems of the reforms took down the economy.

The withdrawal of petrol subsidy registered huge negative impacts on the economy. It triggered a wave of inflation that depleted 60 per cent of the purchasing power of the naira and escalated the poverty rate in the land. Economy watchers derided the government for withdrawing what has been largely considered as the poor man’s protection in a country that has never had a social security system.

The Federal Government endured the criticism as it saw the light at the end of the tunnel. The withdrawal of petrol subsidy was followed by the order by President Bola Ahmed Tinubu to the Central Bank of Nigeria (CBN) to unify the exchange rates of the naira. The CBN was operating, at least, five exchange rates of the naira.

The CBN grudgingly obeyed the president’s directive and unified the exchange rate of the naira. However, it refused to monitor the use of the foreign exchange allocated to banks for sale to end-users. Banks, whIch replaced the bureau de change (BDC) operators as retailers of foreign exchange, hoarded the foreign exchange allocated to them and directed end-users to the BDCs who bought the forex from them at high premium.

That development worsened the depreciation of the naira and by 2024 the Nigerian currency was trading at N1,700 to the dollar, down from N460 in 2023 when the exchange rate of the naira was unified. The economy was in such a bad shape that foreign portfolio investors fled the Nigerian capital market.

By 2023, the foreign exchange in the Nigerian foreign exchange reserve had tumbled to $33 billion. Though that could at that time fund 10 months imports, it was too lean for the CBN to allocate foreign exchange to foreign portfolio investors to repatriate the proceeds of their investments.

Billions of dollars in foreign portfolio investors’ investment proceeds were therefore trapped in Nigeria. That was an incentive for the foreign portfolio investors to flee Nigeria.

However, within months of the withdrawal of petrol subsidy, the revenue to the federation account for sharing by the three tiers of government tripled from N700 billion to more than N2 trillion per month. The Federal Government funded infrastructure rehabilitations that created thousands of jobs.

The foreign exchange market reforms ordered by the president were able to stem speculative bidding and round tripping of forex.  That, and the gains from a surge in export and increase in crude oil production, engendered an increase in the inflow of foreign exchange into the foreign exchange reserves.

Foreign portfolio investors are very sensitive to the quantity of forex in a nation’s foreign exchange reserves because it determines the ease with which they can repatriate the proceeds of their investment.

As the forex in the reserves crossed the $50 billion target, the foreign portfolio investors were convinced that the CBN can allocate forex for the repatriation of their investment proceeds. They started to return to Nigeria. In 2025, they invested $20 billion in the NGX.

Consequently, the market capitalisation of the NGX surged from N30 trillion in 2023 to N160 trillion in September 2026. The All Share Index (ASI) of the NGX rose from a scant 50, 000 points in 2023 to 250, 000 in 2026.

Now, the Securities and Exchange Commission (SEC), the regulator of the capital market, is poised to take the NGX to even greater heights.  The SEC has developed a 10-year Nigerian Capital Market Master Plan 2.0 designed to expand the capitalisation of the NGX to N750 trillion by 2036.

The Nigerian Capital Market Master Plan is expected to raise the market capitalisation of the NGX from 33 per cent of Nigeria’s gross domestic products (GDP) to 60 per cent by 2036. Many see the master plan as ambitious, but market watchers contend that it is attainable. The success of the Capital Market Master Plan requires effective collaboration of the federal government of Nigeria.

Osita Izunaso, the Chairman of the Capital Market Committee of the Senate, highlighted two key market deficiencies that can inhibit the success of the ambitious Capital Market Master Plan. The first one is the reluctance of Nigerian companies to be listed in the NGX. The second one is the reluctance of Nigerians to invest in the NGX. Izunaso lamented that of the six million companies operating in Nigeria, only 151 are listed in the NGX.

Besides, only six million Nigerians invest in the NGX. The federal government can encourage Nigerian companies with incentives to list in the NGX.  Listing in the NGX ensures the survival of the companies after the death of their founders.

The late Louis Odumegu Ojukwu and M.K.O. Abiola were former presidents of the NSE, who owned several companies. They never listed any of their companies in the NSE. None survived them.  Government should educate Nigerian companies’ owners on the gains of listing in the NGX.

Besides, the government should ensure the listing of corporate giants like the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Liquefied Natural Gas (NLNG) Limited and the telecoms companies. That will ensure the success of the master plan.