Analysts at Proshare have raised concerns about the shallow structure and limited breadth of Nigeria’s capital market, warning that these factors continue to hinder its growth and potential to drive economic development.

According to a report on Wednesday titled ‘Nigeria’s Capital Market Outlook 2025: The Capital Market and the Quest for a $1 trn Economy,’ the analysts stated that the Nigerian capital market must undergo reforms to serve as a vehicle for long-term funding and infrastructure development. They emphasised that without addressing these issues, achieving Nigeria’s ambition of becoming a $1tn economy by 2030 would remain unattainable.

“If Nigeria hopes to achieve a $1tn economy by 2030, the capital market needs major fixing. Moving from $364bn in 2023 to $1tn in seven years requires an annual nominal growth rate of 13 per cent. With a federal government GDP growth projection of 4.6 per cent by 2025, the target seems unrealistic,” the analysts stated.

The analysts highlighted the importance of rethinking enablers such as the financialisation of public assets, enhanced market transparency, and the listing of government assets on exchanges like the Nigerian Exchange and FMDQ. These measures, they reasoned, could help deepen the market and attract more domestic and foreign investments.

The report further advocated for leveraging the capital market to reenergise Nigeria’s equities market. “The equities market should serve as a source of cheaper capital raise and not merely an investment trading bourse. Specific funding projects included in the Medium-Term Expenditure Framework must be conducted through the capital market, which has demonstrated foresight and adaptability with its financial market infrastructures,” the analysts noted.

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