Experts advocate stronger governance to sustain Nigeria’s capital market momentum

Nigeria’s impressive capital market performance must be reinforced by stronger institutions, regulatory consistency and legal certainty if it is to deliver long-term economic value. This message resonated throughout the one-day summit held in Lagos, where legal practitioners, regulators, policymakers and operators across the financial services industry examined how Nigeria can transform recent market optimism into sustainable capital formation.

Against the backdrop of a resurgent equities market and sweeping economic reforms, participants argued that the country’s next challenge is no longer attracting investor attention but building the institutional resilience required to retain confidence through changing economic cycles.

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The summit, themed “Structural Resilience and Market Permanence: Anchoring Nigeria’s Capital Surge Beyond the Bull Run,” focused on the legal, regulatory and governance reforms considered necessary to deepen Nigeria’s capital market and position it as a stronger source of long-term financing for economic development.

In his opening remarks, Muhammed Abubakar (SAN), chairman of the summit planning committee, said the gathering was conceived as a platform for developing practical solutions capable of strengthening Nigeria’s investment environment rather than simply celebrating recent market gains.

He noted that periods of strong market performance often create the illusion that sustainable growth has been achieved, whereas enduring capital market development depends on institutions that can maintain investor confidence during periods of uncertainty.

He noted that lawyers involved in capital market transactions occupy a strategic position within the financial ecosystem, serving not only as transaction advisers but also as custodians of regulatory compliance, corporate governance and investor protection. Their responsibilities, he said, extend beyond documentation to ensuring that market integrity is preserved through sound legal structures and effective dispute resolution.

Abubakar further called for deeper collaboration among regulators, legal practitioners and financial institutions, arguing that legislation alone cannot strengthen the market without consistent implementation and coordinated oversight.

Simisola Eyisanmi, CMSA Chairman in her remarks stated that this year’s theme was deliberately selected  to encourage stakeholders to focus on the foundations that support long-term market growth instead of short-lived market rallies.

She described the capital market as a broad ecosystem comprising issuers, investment advisers, issuing houses, custodians, investment banks, registrars and other specialised institutions operating within an established regulatory framework. While stock exchanges remain highly visible components of the ecosystem, she noted that the strength of the market ultimately depends on the quality of governance, regulatory compliance and investor protection across the entire value chain.

Eyisanmi stressed that improving market confidence requires continuous investment in regulatory efficiency, technological innovation, governance standards and sustainable finance. She also encouraged investors to conduct proper due diligence before engaging financial institutions, emphasising the importance of dealing only with entities licensed by the appropriate regulatory authorities.

She said the association has intensified its engagement with the Investment and Securities Tribunal (IST) as part of efforts to improve awareness of the specialised dispute resolution mechanisms available to investors and market participants.

The tribunal featured prominently during one of the summit’s technical sessions, where its chairman, Hon. Junaidu Aminu, highlighted its growing role in preserving confidence within Nigeria’s investment ecosystem.

Aminu explained that the tribunal was established to address the unique nature of capital market disputes by providing a specialised judicial forum with the expertise required to handle complex investment-related matters. Unlike conventional courts, he said, the tribunal is designed to resolve disputes involving securities transactions, regulatory sanctions, listing issues, compliance failures and investor claims within significantly shorter timelines.

According to him, efficient dispute resolution remains one of the most important factors influencing investor confidence, particularly in markets seeking to attract both domestic and foreign capital. He disclosed that reforms introduced within the tribunal are aimed at improving accessibility and ensuring that matters are concluded within prescribed timelines without compromising fairness or due process.

The broader policy direction of government also came under review during the keynote address delivered on behalf of the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.

Representing the Minister of Finance and Coordinating Minister of the Economy, Chimdalu Omailuku-Nwosu,  Special Adviser (legal compliance) to the Minister said Nigeria’s recent market performance reflects improving investor sentiment following a series of macroeconomic reforms implemented by the Federal Government.

She pointed to measures such as exchange rate liberalisation, the removal of fuel subsidies and ongoing tax reforms as policy interventions that have improved fiscal transparency and strengthened market credibility.

However, she warned that favourable economic policies alone cannot sustain capital market growth unless they are supported by predictable regulation, legal certainty and institutions capable of enforcing market rules consistently.

According to her, investors are increasingly looking beyond short-term returns to the overall quality of governance within investment destinations. For Nigeria to remain competitive, she said, reforms must continue to strengthen corporate governance standards, improve regulatory coordination and deepen financial markets through the expansion of products such as bonds and derivatives.

She also acknowledged the role played by capital market solicitors in translating policy reforms into investor confidence, noting that legal advisers help bridge the gap between regulation and market practice by guiding issuers, intermediaries and investors through an increasingly sophisticated regulatory landscape.

Speakers also referenced recent legislative developments, particularly the Investments and Securities Act 2025 and the Companies and Allied Matters Act 2020, describing them as important milestones in modernising Nigeria’s capital market framework. They noted that while the reforms have improved legal clarity and investor safeguards, continuous review of the regulatory environment will be necessary to keep pace with evolving global market standards.

Beyond legislative reforms, participants repeatedly returned to the issue of implementation, arguing that the effectiveness of any legal framework ultimately depends on the capacity of institutions to enforce compliance fairly and consistently.

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The summit concluded with a shared view that Nigeria’s ambition to become a more attractive destination for investment will require more than favourable market conditions. Rather, sustained growth will depend on building institutions that inspire confidence, encourage transparency and provide investors with the certainty required to commit long-term capital.