The Group Managing Director and Chief Executive Officer of the Nigerian Exchange Group, Temi Popoola, says Nigeria’s capital market is gradually gaining credibility as a dependable exit route for institutional investors, supported by recent transactions and ongoing structural reforms.
Speaking during a presentation to investors, Popoola said the real measure of any capital market lies not in how easily investors enter, but in how efficiently they are able to exit their investments.
According to him, recent policy reforms and market developments have helped improve confidence in Nigeria’s financial ecosystem, particularly for long-term investors seeking liquidity and value realisation.
He noted that Nigeria’s capital markets have historically faced challenges such as foreign exchange illiquidity, delays in capital repatriation, and shallow market depth, which previously limited investor confidence.
However, he said reforms introduced since 2023, especially the unification of exchange rates, have improved price discovery, capital flow efficiency, and overall market transparency.
Popoola added that domestic investors now account for about 91 per cent of trading activity, providing a strong liquidity base that has helped stabilise the market even amid global financial uncertainty. Foreign investors, he said, are beginning to return selectively as macroeconomic conditions and policy clarity improve.
He pointed to recent high-profile transactions as evidence of growing investor confidence. One such deal, involving Africa Capital Alliance’s divestment in Aradel Holdings, reportedly delivered a 3.4 times dollar return, underscoring the potential for profitable exits through Nigeria’s public markets.
“Foreign capital has not disappeared; it has become more disciplined,” Popoola said, adding that international investors are now prioritising clarity, execution strength and reliable exit mechanisms before committing funds.
Nigeria remains one of Africa’s largest financial markets, with a population exceeding 240 million and a total market capitalisation of more than ₦187 trillion. Popoola said these fundamentals position the country as a key destination for capital, provided market structures continue to improve.
He stressed that Nigeria’s long-term attractiveness is no longer defined solely by its size, but by its ability to efficiently intermediate capital through deeper and more functional market systems.
While acknowledging existing challenges such as liquidity concentration in a few stocks and macroeconomic volatility, he described these issues as transitional rather than structural constraints.
“Nigeria’s markets are not yet frictionless, but they are no longer static,” he said, noting that ongoing reforms are steadily improving efficiency and investor confidence.