NGX Boss Urges CBN to Integrate Capital Market Development into Monetary Policy for Stronger Economic Growth
The Group Managing Director and Chief Executive Officer of the Nigerian Exchange Group (NGX Group), Temi Popoola, has urged the Central Bank of Nigeria’s Monetary Policy Committee (MPC) to place capital market development at the heart of its monetary policy framework. According to him, the effectiveness of monetary policy can no longer be measured solely by interest rate decisions, but also by the strength, liquidity, and efficiency of the financial markets through which those policies reach businesses and households.
Represented by Jumoke Olaniyan, Group Chief Strategy Officer of NGX Group, at the CBN MPC Workshop held on May 21, 2026, Popoola stressed that monetary policy transmission depends heavily on market infrastructure. Speaking during a session focused on Nigeria’s equity and government debt markets, he argued that weak financial market structures can significantly reduce the impact of policy decisions, regardless of the Monetary Policy Committee’s intentions.
Popoola noted that investors are increasingly responding to broader economic reforms such as foreign exchange adjustments, fiscal policy changes, and improving market confidence rather than reacting solely to movements in the Monetary Policy Rate (MPR). He revealed that Nigeria’s equity market capitalisation has climbed to ₦159.73 trillion in 2026, while the fixed-income market is valued at ₦55.82 trillion. The impressive 60.13 per cent year-to-date gain recorded by the NGX All-Share Index further reflects growing investor optimism despite the prevailing high-interest-rate environment.
Despite these positive indicators, he warned that significant challenges remain. Market participation continues to be concentrated in a handful of dominant sectors, while retail investor involvement remains relatively low. This limited participation, he explained, weakens the broader wealth-creation effect that allows monetary policy benefits to filter down to everyday Nigerians. He also pointed to the gap between the current MPR of 26.50 per cent and the 10-year sovereign bond yield of 14.95 per cent as evidence that investors are increasingly pricing long-term economic reforms rather than short-term interest rate signals.
To improve policy effectiveness, Popoola called for clearer benchmark yield curves, stronger policy communication, enhanced secondary market liquidity, and wider retail investor participation. He further proposed the creation of a Transmission Conditions Index (TCI), a market-driven framework that would help policymakers assess how effectively monetary policy signals are moving through the financial system using real-time market data. According to him, capital market development is no longer just a financial-sector objective but a critical macroeconomic requirement for strengthening policy transmission, boosting investor confidence, and supporting Nigeria’s long-term economic growth.
source: nairametrics