Director at Quartus Economics, David Adeoye, has said Nigeria’s ₦100 trillion stock market capitalisation milestone is a strong signal of renewed investor confidence, but warned it should not be mistaken for broad-based economic prosperity.
Speaking in an interview with ARISE NEWS on Sunday, Adeoye stressed that while the surge reflects improved sentiment in the Nigerian economy and growing participation by foreign investors, it does not automatically translate into higher living standards for ordinary Nigerians.
“Market capitalisation is an aggregate concept,” Adeoye explained. “It is simply the number of listed shares multiplied by their prices. It tells us where the market stands at a particular time, but it does not, on its own, measure poverty, purchasing power, or welfare.”
Adeoye noted that Nigeria’s stock market has expanded significantly over time, growing from about ₦2.7 trillion in 2005 to over ₦100 trillion today — a 37-fold increase in 20 years, and four times its size in 2015.
“That tells us the market has grown in leaps and bounds,” he said. “But we also need to be careful because part of this growth reflects inflation and currency weakness, not just real economic expansion.”
Despite these caveats, Adeoye said the milestone should still be viewed positively, particularly as a signal to both local and foreign investors.
“When people bring money into the capital market, they are expressing confidence in the economy and in the currency,” he said. “Between 2024 and 2025, foreign participation on the Nigerian Exchange rose from below 20 per cent to about 27 per cent. That shows the global investment community has more confidence in Nigeria today than it did 12 to 15 months ago.”
He added that investing in Nigerian equities also represents a vote of confidence in the naira.
“The NGX is a naira market, not a dollar market,” Adeoye said. “So when both Nigerians and foreigners invest, they are taking a risk on the naira. That is a reversal from the past, when people rushed into dollars as a safe haven.”
However, Adeoye cautioned against conflating foreign portfolio inflows into equities with foreign direct investment (FDI).
“We will be making a mistake if we equate portfolio investment with foreign direct investment,” he said. “Portfolio investors can exit quickly if policy signals change, but FDI involves building factories, service centres and long-term productive capacity. That is what ultimately drives jobs, incomes and welfare.”
On concerns that Nigeria’s stock market wealth is concentrated in the hands of a few billionaires, Adeoye argued that this reality must be viewed in proper context.
“Having a country’s leading billionaires invested in the domestic stock market is actually a positive,” he said. “The alternative would be for their wealth to be entirely outside the country.”
He pointed out that many of Nigeria’s largest investors are industrialists who built manufacturing enterprises from scratch.
“These are people who built large-scale enterprises,” Adeoye said. “Manufacturing is something Nigeria and Africa have historically struggled with, so their presence in the market is not necessarily a bad thing.”
Addressing claims of weak liquidity and limited free float in the market, Adeoye said the issue reflects regulatory gaps rather than outright failure.
“I wouldn’t call it negligence,” he said. “I would call it a gap. Regulations were made at a time when certain outcomes may not have been fully foreseen. If the Securities and Exchange Commission determines that minimum free-float requirements need adjustment, that can be addressed.”
He compared potential reforms to past banking sector recapitalisation exercises.
“Just as the Central Bank adjusted bank capital requirements in 2005 and again recently, the SEC can respond if a proper diagnosis shows changes are needed to deepen market liquidity,” he said.
Adeoye also rejected the notion that ordinary Nigerians are excluded from the capital market.
“Nigerians are not precluded from participating,” he said. “With the right financial adviser and stockbroker, anyone can invest. The challenge is investor education and risk appetite.”
On claims that Nigeria’s stock market has outperformed global indices such as the S&P 500 or FTSE 100, Adeoye urged caution.
“It depends on what indices you are comparing and in what currency,” he said. “There is market return and there is currency return. If you adjust for currency effects, you may get a very different picture.”
He further highlighted structural concentration within the market.
“By mid-2025, just 23 companies accounted for about 88 per cent of total market value,” Adeoye said. “That concentration is not just about individuals, but about sectors and activity levels, and it is something policymakers must examine.”
Despite lingering weaknesses, Adeoye said the recent rally suggests Nigeria’s economy is emerging from a prolonged period of stagnation.
“If a patient has been in a coma for a long time and begins to blink and respond, it is time to give thanks,” he said. “That does not mean the patient is fully healed, but it means recovery has begun.”
He concluded by stressing that capital market growth must ultimately be matched by deeper structural reforms.
“What we are seeing today is good news,” Adeoye said. “But for it to matter to the average Nigerian, it must translate into productive activity, better jobs, higher incomes and real improvements in living standards.”
Boluwatife Enome
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