Nigeria’s capital market is emerging as a more credible exit route for institutional investors, according to Temi Popoola, who cited recent high-value transactions and ongoing structural reforms as key drivers of improved market functionality.
Speaking during an investor presentation last week, the group managing director and chief executive officer of Nigerian Exchange Group (NGX Group) emphasised that the strength of any market lies not in capital inflows but in the ability of investors to exit efficiently.
“The true test of any market is not entry, but exit,” Popoola said.
Nigeria’s markets have long faced constraints including foreign exchange illiquidity, repatriation delays, and shallow depth. However, reforms implemented since 2023 (most notably exchange rate unification), have begun to improve price discovery and enhance capital mobility, he noted.
Domestic investors currently account for about 91 percent of total market activity, providing a stable liquidity base, while foreign participation is gradually recovering as macroeconomic conditions stabilise and policy clarity improves.
Recent deal activity is also reshaping investor sentiment. A notable divestment by Africa Capital Alliance in Aradel Holdings delivered a 3.4x dollar return, underscoring the potential for large-scale exits via the public market.
“Foreign capital hasn’t disappeared; it has become more disciplined,” Popoola added, pointing to a more selective re-engagement by international investors focused on execution certainty and viable exit pathways.
With a population exceeding 240 million and total market capitalisation above N187 trillion, Nigeria remains one of Africa’s largest investment destinations. Increasingly, however, its attractiveness is being defined not just by scale, but by its ability to intermediate capital through more efficient and transparent market structures.
While acknowledging persistent challenges, including liquidity concentration and macroeconomic volatility, Popoola described these as transitional constraints rather than fundamental weaknesses.
“Nigeria’s markets are not yet frictionless, but they are no longer static,” he said, signalling a gradual but meaningful evolution in market depth and investor confidence.
