Nigeria’s capital market is shedding long-standing doubts about its ability to deliver investor exits, with recent reforms and transactions positioning it as an increasingly credible destination for institutional capital, according to the Group Managing Director and Chief Executive Officer of Nigerian Exchange Group, Temi Popoola.

Speaking during a presentation to investors last week, Popoola declared that the strength of any financial market lies not in attracting capital, but in enabling investors to exit efficiently.

“The true test of any market is not entry, but exit,” he said.

For years, Nigeria’s equities market has been weighed down by foreign exchange illiquidity, delayed capital repatriation, and shallow market depth, factors that discouraged foreign portfolio investors and constrained large-scale transactions.

However, a wave of reforms introduced since 2023, particularly the unification of exchange rates, is beginning to shift that narrative. According to Popoola, these measures have enhanced price discovery, improved transparency, and strengthened capital mobility across the market.

The transformation is also being underpinned by strong domestic participation. Local investors now account for about 91 percent of total market activity, providing a more stable liquidity base even as foreign investors cautiously re-enter.

“Foreign capital hasn’t disappeared; it has become more disciplined,” Popoola noted, adding that global investors are selectively returning to markets where there is clearer visibility on execution and exit pathways.

Recent high-profile deals are reinforcing that confidence. A notable divestment by Africa Capital Alliance in Aradel Holdings delivered a 3.4-times return in dollar terms, highlighting the growing viability of the public market as an exit channel for private equity players.

With a population exceeding 240 million and market capitalisation above N187 trillion, Nigeria remains one of Africa’s most significant investment destinations. But beyond scale, Popoola stressed that the country’s future appeal will depend on the efficiency of its financial system in channeling and recycling capital.

While acknowledging lingering concerns such as liquidity concentration and macroeconomic volatility, he described these challenges as part of a transitional phase rather than deep-rooted structural weaknesses.

“Nigeria’s markets are not yet frictionless, but they are no longer static,” he said.

The evolving landscape suggests a market in transition, one gradually aligning with global expectations, and increasingly capable of delivering the one outcome investors value most: a reliable way out.

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