Capital Market Operators Push for Bold Reforms to Restore Investor Confidence in Nigeria
Capital market operators have renewed calls for the Federal Government to implement bold reforms that would attract more companies to the Nigerian Exchange (NGX) and boost investor confidence. Speaking in Lagos, market experts stressed the importance of incentives such as tax breaks, reduced listing fees, and regulatory clarity to encourage both new and existing firms to list publicly. They argued that Nigeria’s capital market—despite economic headwinds—remains a vital engine of growth and must be repositioned to compete globally.
One of the key proposals is the revival of margin trading and securities lending, structured in a transparent and well-regulated manner. Experts believe that such measures would deepen liquidity, expand participation, and create a more dynamic trading environment. According to Tajudeen Olayinka, investment banker and stockbroker, the NGX has consistently supported economic development over its 64-year history, serving as a critical platform for raising capital across sectors. He noted that foreign portfolio investments tied to listed securities have helped stabilize the naira and cushion inflationary pressures.
Similarly, financial analyst Uwen Olubummo emphasized that many high-performing Nigerian companies, particularly in the tech and energy sectors, remain unlisted due to weak incentives and regulatory bottlenecks. She recommended targeted policies, including streamlined compliance, to lure such firms into the capital market. She also highlighted the need for investor education to empower retail investors, reduce volatility, and strengthen market trust. Olubummo credited recent digitization, better reporting standards, and the NGX’s 2021 demutualisation as positive steps but insisted more must be done to achieve sustainable growth.
For shareholders, the issues extend beyond listing hurdles. Patrick Ajudua, President of the New Dimension Shareholders Association of Nigeria, pointed to persistent challenges such as foreign exchange scarcity, high taxation, and inflation as barriers to investment. He described double taxation as a disincentive, urged regulators to reduce compliance costs, and warned that high energy and financing costs are crippling companies’ profitability. Ajudua also cautioned against the introduction of a capital gains tax, arguing that it would discourage market participation and erode investor returns.
Despite these challenges, optimism remains. Stakeholders agree that with the right mix of fiscal incentives, regulatory reforms, and stable economic policies, the Nigerian capital market could attract new listings, improve liquidity, and strengthen investor confidence. Analysts maintain that such reforms would not only diversify the market but also provide long-term capital for businesses, create jobs, and support Nigeria’s economic transformation.
source: the guardian