Nigerians Trade $50 Billion in Crypto as SEC Warns of Declining Capital Market Participation

Nigeria’s Securities and Exchange Commission (SEC) has expressed concern over the country’s growing preference for cryptocurrency trading, warning that the trend is diverting funds and attention away from the traditional capital market. The Director-General of the SEC, Emomotimi Agama, revealed that Nigerians traded more than $50 billion worth of cryptocurrencies between July 2023 and June 2024, reflecting a massive shift in investment behavior and an appetite for high-risk digital assets.

Speaking at the Chartered Institute of Stockbrokers’ Annual Conference, Agama said the surge in crypto transactions highlights both the sophistication and risk tolerance of Nigerian investors—traits that have yet to be fully captured by the nation’s formal financial markets. He noted that despite the boom in digital trading, fewer than four per cent of Nigerian adults currently invest in the capital market, underscoring the sector’s struggle to attract retail participation.

Agama described the situation as a significant challenge to Nigeria’s economic development, emphasizing that a vibrant capital market is essential for funding businesses, infrastructure, and long-term national growth. He lamented that fewer than three million Nigerians are active investors, compared to over 60 million people who engage in daily gambling activities valued at approximately $5.5 million. The trend, he said, reflects a worrying disconnection between financial literacy and sustainable wealth creation.

Comparing Nigeria’s market performance with global peers, the SEC chief disclosed that the country’s market capitalization-to-GDP ratio stands at 30 per cent, lagging behind South Africa’s 320 per cent, Malaysia’s 123 per cent, and India’s 92 per cent. These figures, he said, illustrate the urgent need for structural reforms and renewed investor confidence in Nigeria’s formal markets.

Agama called for stronger financial inclusion strategies, trust-building initiatives, and regulatory reforms to attract more retail investors. He urged stakeholders to view the capital market not just as an investment hub but as a crucial tool for economic transformation, capable of mobilizing domestic savings and channeling them into productive ventures that drive sustainable growth.

 source: punch