A map of Nigeria
By Peter Egwuatu
Despite some of the improvement recorded by the Nigerian capital market in the past 60 years, the journey to making the Nigerian capital market “one of the largest, most liquid, most diversified and most sophisticated emerging markets by 2025” as envisioned by the Capital Market Master Plan CMMP, seems very far, UcheUwaleke, a professor of Capital Market at the Nasarawa State University, has said.
In his comment on Nigeria at 60: whither the capital market?, he said: “The market is still shallow and yet to be properly positioned to support Nigeria’s economic priorities. At less than 20 per cent of the country’s Gross Domestic Product, GDP, the size of the capital market constrains its role in economic development. Compared to South Africa with over $1trillion in market capitalization representing over 200 per cent of the country’s GDP, the total market capitalization in Nigeria actually pales into insignificance.”
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According to him : “A few years ago, the Nigerian Stock Exchange, NSE had set a target of $1trillion market capitalization by 2016 but it never materialized. Closely tied to this is the non-diversified nature of the issuer base with listing concentrated in a few sectors as well as the small number of listed companies (less than 200) in a country touted as the biggest economy in Africa. As a corollary, market liquidity, measured by turnover, remains a challenge despite the appointment of market makers in 2012 expected to provide liquidity to securities through the provision of bid and offer prices.
