By Taiye Olayemi

Lagos Chamber of Commerce and Industry (LCCI) has called for consistent policies and robust reforms to unlock the full potential of the capital market and double its capitalisation to N150 trillion.

The President of LCCI, Mr Gabriel Idahosa, made the call on Thursday while delivering his remarks at a stakeholder forum organised by the Securities and Exchange Commission (SEC), in collaboration with LCCI.

The theme of the forum is “Unlocking Capital Market Opportunities for Business Growth and Development”.

Idahosa said with the capital market closing the first half of 2024 with N74 trillion market capitalisation, consistent policies and reforms were capable of pushing the figures higher.

He said that the right reforms could help double the market capitalisation to N150 trillion and halve the SME financing gap by 2030.

He added that to achieve this, stronger collaboration among stakeholders was needed, which would also ensure sustainable business growth and economic development.

“The statistics speak louder than rhetoric: N74 trillion in market capitalisation in the first half of 2024, N8.6 trillion raised in just 14 months, N1.09 trillion in sovereign sukuk to date, N13.2 trillion in new wealth created in six months, and US$35 trillion in global ESG funds looking for credible destinations.

“Nigeria’s capital market is no longer a sideshow but a strategic battlefield for our economic destiny.

“If we mobilise the reforms outlined today, we can double market capitalisation to N150 trillion and cut the SME financing gap by half before the end of this decade,” he said.

Idahosa noted that Nigeria’s capital market had shown remarkable resilience and depth over the past 18 months.

He said that as of June 20, 2024, total market capitalisation on the Nigerian Exchange Ltd. (NGX) stood at N74 trillion, its highest in history at that time, with the All Share Index gaining 16.57 per cent in the first half of 2024 alone.

He explained that this translated to N13.2 trillion in additional investor wealth, marking the sixth consecutive positive first-half performance since 2020.

Citing the World Bank, Idahosa said Nigeria’s economy was rebounding strongly, with real GDP expanding by 4.6 per cent in the fourth quarter of 2024, the fastest quarterly growth in a decade.

He said that growth was projected to reach 3.6 per cent in 2025 in spite of inflationary challenges.

He, however, emphasised that the nation’s constrained fiscal space and limited bank credit meant the capital market must play a bigger role in bridging the financing gap for businesses and infrastructure.

He disclosed that between January 2024 and March, governments and corporates had raised N8.6 trillion through equity and fixed-income instruments, while listed companies paid out over N1.1 trillion in dividends in 2024, boosting investor confidence.

Highlighting emerging opportunities, Idahosa identified six high-growth areas for deepening capital market activities.

He said this included infrastructure sukuk and green bonds, ESG-oriented capital, corporate bonds, the Technology and SME Growth Boards, crowdfunding, and regional and diaspora listings.

He revealed that the Federal Government had so far raised N1.09 trillion through sovereign sukuk, funding 44 highway and bridge projects nationwide.

He said that the growing appetite for ESG assets globally, estimated to reach $35.48 trillion in the year, which presented significant prospects for local issuers.

Idahosa urged issuers to explore innovative funding options beyond traditional bank loans, such as sukuk, commercial paper, and real estate investment trusts.

He called on institutional investors to reallocate more assets toward long-term growth equities.

Idahosa noted that even a one percentage point shift in pension assets under management, now worth N18.4 trillion, could unlock N184 billion in fresh risk capital.

He further appealed to policymakers to ensure policy consistency to lower borrowing costs and to regulators to fast-track the introduction of carbon credit trading and commodity derivatives to support critical sectors like agribusiness.

Idahosa assured that the LCCI would continue to work closely with the SEC and other stakeholders to translate available opportunities into real economic growth and shared prosperity for Nigerians. (NAN) (www.nannews.ng)

Edited by Olawunmi Ashafa