SEC Nigeria: Building a sustainable capital market for economic prosperity

Emomotimi Agama, DG, SEC

The Nigerian capital market has long been recognised as the barometer of the nation’s economic health and a critical engine for growth. Under the strategic leadership of the Securities and Exchange Commission (SEC Nigeria), this engine is being meticulously retooled, refined, and accelerated. The Commission is no longer just a regulator; it is a visionary architect, constructing a market that is resilient, inclusive, innovative, and globally competitive. This multi-faceted transformation, focused on sustainability and economic prosperity, is evident in several landmark initiatives.

The Cornerstone: The Investments and Securities Act (ISA) 2025

A robust legal framework is the bedrock of any thriving capital market.And Recognizing that the previous Act was struggling to keep pace with a rapidly evolving financial landscape, the SEC championed the groundbreaking Investments and Securities Act (ISA) 2025. According to market stakeholders, this is not merely an amendment. it is also a comprehensive overhaul designed for the future.

Key innovations of the ISA 2025 include:

· Enhanced Regulatory Powers: It grants the SEC sharper teeth to proactively address complex market abuses, cyber-security threats, and the cross-border nature of modern finance. · Embracing FinTech and Digital Assets: The Act provides clear regulatory certainty for digital assets, including cryptocurrencies and tokenized securities, fostering innovation while ensuring investor protection. · Strengthening Corporate Governance: It introduces stricter governance codes and accountability measures for publicly listed companies, enhancing market integrity and attracting quality listings. · Streamlined Dispute Resolution: The Act establishes more efficient mechanisms for resolving investor grievances, bolstering confidence in the market’s fairness.

The ISA 2025 is the strategic blueprint that empowers all other initiatives, positioning Nigeria as a forward-thinking jurisdiction for investment.

Protecting the Investor: The unrelenting clampdown on Ponzi schemes

The scourge of Ponzi and other illegal investment schemes has eroded the savings of countless Nigerians and dented public trust. However, the SEC, under its “Operation Know and Verify” campaign, has moved from advisories to aggressive action. Leveraging the enhanced powers of the ISA 2025, the Commission is:

· Employing Advanced Surveillance: Utilizing technology and data analytics to identify and track the digital footprints of illegal fund managers. · Enforcing Swift Sanctions: Perpetrators now face severe penalties, including asset forfeiture and prosecution, serving as a strong deterrent. · Massive Public Enlightenment: A relentless campaign across traditional and social media educates citizens on how to identify and report these schemes, making the public the first line of defense.

This unwavering commitment to cleansing the market ecosystem is fundamental to preserving its integrity and protecting the hard-earned money of Nigerians.

Deepening Inclusivity: The Strategic Promotion of Non-Interest Finance

In a bid to tap into a vast pool of domestic and international capital, the SEC has placed a strategic focus on growing the Non-Interest Finance (NIF) segment. Understanding its appeal beyond religious considerations to include ethical and alternative financing, the Commission has:

Developed a Robust Regulatory Framework: Creating clear guidelines for the issuance of Sukuk, Islamic funds, and other NIF products. · Catalyzed Market Activity: The success of sovereign Sukuk issuances for infrastructure development has demonstrated the viability of the asset class, paving the way for corporate issuers. · Fostered Capacity Building: Working with market operators to build expertise in structuring, distributing, and managing NIF products.

This focus is not just about inclusion; it is also bout unlocking billions of dollars in ethical capital for national development, funding critical projects in infrastructure, housing, and agriculture.

Going Global: Strategic International Engagements and Partnerships

No capital market is an island. The SEC has proactively re-engaged with the global financial community to attract foreign investment, share best practices, and enhance Nigeria’s standing.

· Membership in International Bodies: Active participation in organizations like the International Organization of Securities Commissions (IOSCO) ensures Nigeria’s voice is heard and its regulations are aligned with global standards. · Roadshows and Investor Meetings: Targeted engagements in key financial hubs like London, New York, and Dubai are showcasing the reformed Nigerian market and its attractive investment opportunities. · Signing of MoUs: Bilateral agreements with other capital market regulators facilitate cross-border supervision and information exchange.

The Proof is in the Numbers: Significant Growth in Market Capitalization

The tangible outcome of these strategic reforms is a market experiencing remarkable growth. The Nigerian Exchange Limited (NGX) has witnessed a significant surge in market capitalisation, breaching historic milestones. For instance, the stock market section of the Nigerian Exchange Limited (NGX) gained 45.5 per cent or N28.52 trillion to hit N91.286 trillion as at the end of November, up from N62.763 trillion at the end of 2024. Similarly, the NGX All-Share Index closed November. 2025, at 143,520.53 basis points, up by 39.44 per cent, from the 102,926.40 basis points at the close of 2024. This growth is driven by:

· Increased Investor Confidence: Both local and foreign investors are responding positively to the enhanced regulatory environment. · New Listings: Attracting major domestic companies to list and rewarding them with higher valuations. · Robust Performance of Key Sectors: Banking, telecommunications, and consumer goods have shown impressive resilience and growth.

This rising capitalization is a direct vote of confidence in the SEC’s stewardship and a powerful indicator of the market’s vital role in wealth creation.

Collaborating for Development: The World Bank, IFC, and FSD Africa

Recognizing the value of strategic partnerships, the SEC has deepened its collaboration with development finance institutions. Working closely with the World Bank, the International Finance Corporation (IFC), and FSD Africa has been instrumental in:

· Technical Assistance: Building internal capacity for risk-based supervision and developing new market segments like green bonds. · Market Development: Supporting initiatives to deepen the corporate bond market and enhance liquidity. · Investor Education Programs: Co-funding nationwide campaigns to improve financial literacy.

These partnerships provide not just funding, but world-class knowledge and technical expertise, accelerating the market’s development trajectory.

The Landmark Move: Transitioning from T+3 to T+2 Settlement

In a landmark move for market efficiency, the SEC successfully orchestrated the transition from a T+3 to a T+2 settlement cycle. This means trades are now settled two business days after the transaction date, instead of three.

The implications are profound:

· Reduced Counterparty Risk: Shorter settlement times mean less exposure to default risk for buyers and sellers. · Enhanced Liquidity: Investors get access to their funds and securities faster, improving capital efficiency. · Global Competitiveness: The T+2 cycle aligns Nigeria with leading global markets like the United States and Europe, making it more attractive for international investors.

This technical achievement, though complex in its execution, demonstrates the SEC’s commitment to building a market that is not only large but also efficient and modern.

A Market Reimagined for a Prosperous Future

The journey of the Nigerian capital market under the current leadership of the SEC is a compelling narrative of transformation. By strengthening its legal foundations with the ISA 2025, protecting investors, promoting inclusive finance, engaging globally, fostering strategic partnerships, and enhancing operational efficiency, the Commission is building more than just a market—it is building a sustainable platform for long-term economic prosperity. The significant growth in market capitalization is the resounding echo of these efforts. As Nigeria continues on its path of economic diversification and development, a dynamic, transparent, and robust capital market, as championed by the SEC, will undoubtedly be its cornerstone.

Ayodeji Komolafe, an economist and investment banker, writes from Lagos.

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