Nigeria’s Capital Market Gains Investor Exit Credibility Amid Reforms – NGX Boss

Nigeria’s capital market is gradually gaining stronger credibility as a reliable exit route for institutional investors, according to the Group Managing Director and CEO of the Nigerian Exchange Group, Temi Popoola. He noted that recent transactions and ongoing market reforms are reshaping how both local and foreign investors view Nigeria’s financial system.

Speaking at an investor presentation, Popoola explained that the real measure of any market is not just how easily capital enters, but how efficiently it exits. He pointed out that Nigeria’s market has historically faced challenges such as foreign exchange illiquidity, delays in capital repatriation, and limited market depth, all of which previously discouraged long-term foreign participation.

However, he said reforms introduced since 2023, especially the unification of exchange rates, have improved price discovery and enhanced capital mobility. Domestic investors now dominate about 91% of market activity, providing a strong liquidity base, while foreign investors are cautiously returning as confidence improves.

Popoola also referenced recent high-profile transactions, including the divestment by Africa Capital Alliance in Aradel Holdings, which delivered a 3.4x dollar return. He said such deals are helping to reshape global investor perception and proving that meaningful exits through Nigeria’s public markets are possible.

Despite acknowledging ongoing issues such as liquidity concentration and macroeconomic volatility, Popoola maintained that these are transitional challenges rather than structural weaknesses. According to him, Nigeria’s market is evolving: “It is not yet frictionless, but it is no longer static,” reflecting a system that is steadily becoming more functional and globally relevant.

source: The Guardian