Nigeria accelerates capital market modernisation

Nigeria’s Securities and Exchange Commission (SEC) has unveiled an ambitious set of reforms designed to boost market efficiency, strengthen investor confidence, and fast-track the digital transformation of the nation’s capital market. At the second Capital Market Committee (CMC) meeting of 2025, SEC Director-General, Dr. Emomotimi Agama confirmed that Nigeria is moving toward a T+1—and eventually […]

Nigeria’s Securities and Exchange Commission (SEC) has unveiled an ambitious set of reforms designed to boost market efficiency, strengthen investor confidence, and fast-track the digital transformation of the nation’s capital market.

At the second Capital Market Committee (CMC) meeting of 2025, SEC Director-General, Dr. Emomotimi Agama confirmed that Nigeria is moving toward a T+1—and eventually T+0—settlement cycle.

He described the recent shift from T+3 to T+2 settlement for equities, implemented on November 28, as a major milestone that aligns Nigeria with global best practice, enhances liquidity, reduces counterparty risk, and speeds up capital reinvestment.

The new settlement timeline now applies across the Nigerian Exchange, NASD OTC Securities Exchange, and the Lagos Commodities and Futures Exchange.

Agama highlighted several positive developments since the last CMC meeting in May, including Nigeria’s sovereign credit rating upgrade and removal from the FATF grey list—both of which have improved investor sentiment and prospects for capital inflows. Inflation has also eased to 16.05 percent year-on-year in October, its lowest level since March 2025.

Capital-raising activities remained strong between April and October, with sizable transactions approved across debt, equity, and commercial paper markets. Notable programmes include the N500bn Climate Funding SPV and the N200bn Elektron Finance bond, signaling continued investor interest in infrastructure and sustainable finance. The commercial paper market saw over N753bn in issuances across manufacturing, energy, and agriculture, reflecting steady confidence in the regulatory framework.

 

However, the market faltered in November, recording its steepest monthly decline on record. Market capitalization fell by N6.54trn and the All-Share Index dropped nearly 7 per cent, driven by profit-taking ahead of the proposed 30 per cent capital gains tax, weak sentiment in banking stocks, and broader policy uncertainties.

 

Daily Trust reports that the government is already contemplating a review of the CGT.

 

Agama noted that modest recovery has followed government assurances on fiscal and tax policy, and the market remains strongly positive year-to-date.

 

The SEC stated that it is intensifying its market development and financial inclusion efforts through education initiatives, including integrating capital market studies into the national secondary school curriculum in collaboration with the Nigerian Educational Research and Development Council.

 

At the tertiary level, the Commission partnered with Nnamdi Azikiwe University on a conference exploring capital market opportunities for SME growth.

 

Agama also outlined ongoing efforts to deepen the commodities and derivatives ecosystem.

 

He said the SEC is collaborating with the Standards Organisation of Nigeria to update commodity standards, working with insurance brokers on risk mitigation, and partnering with the Ministry of Solid Minerals to support financing for mining companies.

 

He added that it is engaging the Central Bank of Nigeria to secure liquidity status for warehouse receipts and strengthening oversight of commodity exchanges through inspections and financial reviews.

 

Under the Investments and Securities Act (ISA) 2025, the Commission is advancing rules to support commodity exchanges, collateral managers, warehouse operators, and warehouse receipt issuers. Study tours of exchanges and clearing agencies are guiding updates to the regulatory framework, while engagements with commodity exchanges such as Gezawa and NCX have contributed to reviving their operations.

 

In the derivatives market, the SEC is working with stakeholders to deploy a real-time surveillance system aimed at enhancing market integrity. Updated rules on central counterparties, derivatives trading, online forex, and NG Clearing operations are now before the Rules Committee. A draft systemic risk management rule is also in progress to strengthen risk governance across regulated entities.

 

Agama emphasized the Commission’s technology-driven reforms, including expanded automation through the Digital Transformation Portal. Capital market operators can now submit applications, upload documents, and track approvals online. A commercial paper issuance module has launched, and automation of quarterly and annual returns is underway.

 

 

Agama reaffirmed the SEC’s commitment to building a resilient, transparent, and innovation-driven capital market, noting that “a strong capital market is not built in a day; it is shaped by vision, collaboration, and resilience.”