Analysts hail Dubai's dedicated stock market for SMEs, but say Nigeria not ripe

The conference, sponsored by the Nigerian Stock Exchange (NSE), CardinalStone; Fidelity Bank, Cordos Capital and United Capital Plc, would provide and share ideas on how various capital market regulators and stock exchanges in Nigeria could attract more SMEs on their platform

Dubai has launched a new stock market, the Nasdaq Dubai Growth Market, for businesses that fall under the SME sub-sector, to help fast-growing companies to achieve a “cost-effective” listing and form part of the Dubai Future District project.

Analysts say this dedicated stock market for Small and Medium Enterprises (SMEs) is a good idea. Some add, however, that it is not yet needed in Nigeria.

“Good thinking,” Taiwo Oyedele, head of tax at PwC, tweeted, saying it will not be a bad idea to have a dedicated stock market for SMEs in Nigeria.
This, he said, would help finance growth and encourage small businesses to develop good corporate governance practices.

In Nigeria, SMEs contribute about 76 percent of the workforce, with contribution to GDP at about 50 percent and contribution to exports at 8 percent.

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The total number of SME establishments in Dubai is estimated at 151,875 and they have registered a 9 percent compounded annual growth rate (CAGR) since 2008 when the SME business count was estimated at 72,695. Micro firms account for 61 percent of the total business count in Dubai, followed by small and medium firms that account for 36 percent and 2 percent of the total number of enterprises in Dubai, respectively, according to Gulf News.

But Olalekan Aworinde, senior lecturer, Department of Economics, Pan-Atlantic University, Lagos, said the primary market and the secondary market in Nigeria are not fully developed and thus, there is no need for the stock market dedicated for the SMEs in Nigeria.
“As much as I believe that the SMEs can engender growth in Nigeria, they do not have the required capital to trade on the market. In addition, the number of SMEs in Nigeria is not known and I think the first thing to do is to have adequate data base for SMEs,” he said.

Aworinde said majority of the SMEs in Nigeria are enterprises and not limited liability companies and as such they do not have the requirements to trade on the floor of the Nigeria Stock Exchange (NSE).

To drive growth of the SMEs in Nigeria, he said there is the need to provide an enabling environment first, before being listed on the stock exchange.

“Thus, the idea is good, but not needed in Nigeria for now,” Aworinde told BusinessDay.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.