Creating access to financing in Nigeria’s capital market

The global economy has been facing financial imbalances that have been straining its rebound. Companies are seeking ways to find balance through local market sourcing to access much-needed capital. Jude Chiemaka, the Divisional Head of Capital Markets at the Nigerian Exchange Limited (NGX), recently discussed the initiatives the NGX is undertaking to create a thriving ecosystem for companies in Nigeria. One of the key areas of focus for the NGX is advocacy and product development to ensure the synchronization of capital users and providers on their platform. They are also emphasizing ESG-related products to support sustainability initiatives, such as facilitating the introduction of green bonds in Nigeria. Additionally, the NGX is exploring Islamic finance and collaborating with international partners to enable local entities to raise capital using this financial instrument. Last year, the NGX hosted the first capital market conference in Nigeria to address issues hindering capital-raising and implement solutions. They also launched the first exchange-traded derivatives in West Africa to help manage risk and optimize product offerings. Embracing technology, the NGX facilitated the first digital IPO, attracting 150,000 new clients to the platform. Investor education remains a priority to ensure informed decision-making. The upcoming CEO Roundtable event aims to bring industry stakeholders together to enhance the capital market ecosystem. The event will be graced by esteemed personalities from government and financial regulatory bodies, seeking to create an enabling environment for capital access. The NGX is also engaging tech companies, including Fintechs, to attract potential issuers to the market. They are collaborating with regulators to create listing rules tailored to accommodate tech firms' valuation metrics. Through capacity building and investor education, the NGX aims to support these companies in tapping into the capital market. The success of the digital IPO highlights the market's readiness for technological advancements, streamlining processes and enhancing investor participation. Looking ahead, the NGX has pipeline transactions awaiting regulatory approval. The market can anticipate new listings in diverse sectors over the coming months, driving market excitement and enhancing participation. With a focus on deepening the market and leveraging technology, the NGX is committed to providing a platform for companies to raise capital across different asset classes. Last year, the NGX facilitated the mobilization of 3.3 trillion in capital from corporations and governments, underscoring its pivotal role in the Nigerian capital market's growth.