Nigeria’s capital market contribution to GDP rises to 33% with over N123.93trn

Nigeria’s capital market contribution to Gross Domestic Product (GDP) climbed sharply to 33%, as total market capitalisation surged to over N123.93 trillion from about N55 trillion in April 2024, representing a 125% increase, according to the Securities and Exchange Commission (SEC).

SEC Director-General, Dr. Emomotimi Agama, disclosed the figures during his inaugural address to members of the Capital Market Working Group on Market Liquidity in Lagos on Sunday, February 22, highlighting the market’s expanding influence on national economic performance.

While describing the growth as historic, Agama cautioned that sustaining the momentum will require deeper liquidity and improved trading efficiency to ensure long-term stability and investor confidence.

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What they are saying

Agama said the impressive growth figures reflect investor confidence and resilience under the current administration.

He, however, warned that headline numbers alone do not capture the full health of the market.

• _“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% to 33%. These are impressive figures, but they tell only part of the story.” _
• _“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.” _
• _“The capital market is not gambling; it is the engine of national development. It finances roads, powers factories and creates jobs.” _

He emphasised that liquidity remains critical to sustaining growth momentum and ensuring the market performs its primary function of capital formation effectively.

More insights

The SEC DG acknowledged that despite the sharp expansion in market value, structural challenges persist within the system. He noted that without sufficient depth, investors may hesitate to participate fully in the market.

• High transaction impact costs for institutional investors continue to affect trading efficiency.
• Trading activities remain concentrated in a limited number of highly capitalised stocks, leaving a large segment of listed equities relatively illiquid.
• Limited liquidity could weaken investor appetite if participants are uncertain about their ability to exit positions without significant price distortions.
• A functional capital market must allow investors to enter and exit positions seamlessly without excessive cost.

He reiterated that the capital market must serve as a reliable barometer of economic health, which requires depth and efficiency in addition to scale.

Backstory

To address these concerns, the SEC inaugurated a multi-stakeholder Working Group comprising exchanges, custodians, fund managers, dealing members and other market operators.

The committee has been mandated to develop practical reforms aimed at strengthening liquidity and improving price discovery.

• The group will conduct a comprehensive review of trading and settlement infrastructure to identify technical and structural bottlenecks.
• It is expected to propose measures to make Nigeria’s settlement cycle more competitive compared to other emerging markets.
• The SEC is targeting the onboarding of up to 20 million new retail investors through digital platforms, dematerialisation of share certificates and fintech partnerships.
• Product innovation, particularly the development of derivatives and other asset classes, has been identified as key to expanding hedging opportunities and deepening market activity.

Agama added that the recently enacted Investments and Securities Act (ISA) 2025 has expanded regulatory oversight to include digital assets, creating an opportunity to channel speculative activity into regulated and productive investment vehicles.

**What you should know **

The SEC’s liquidity reform drive forms part of its broader 2026 agenda focused on stimulating long-term capital formation and broadening investor access. Regulators say the goal is to ensure that recent gains in market capitalisation translate into sustainable and inclusive growth.

• The Capital Market Working Group on Market Liquidity was inaugurated to tackle high transaction costs and limited trading depth.
• The initiative brings together key market stakeholders to deliver measurable reforms that enhance trading efficiency and restore confidence.
• The SEC’s broader strategy aims to mobilise long-term capital to address Nigeria’s infrastructure gaps and support economic expansion.

As Nigeria pursues its ambition of building a trillion-dollar economy, the Commission maintains that the next phase of reform will focus on ensuring the capital market is not only large, but deep, inclusive and globally competitive.