By Adefolarin A. Olamilekan
Since taking office on May 29, 2023, President Bola Ahmed Tinubu has embarked on a sweeping economic reform agenda aimed at repositioning Nigeria’s economy for long-term sustainability and private-sector-driven growth. Among the core components of these reforms are the removal of the fuel subsidy, unification of exchange rates, and fiscal adjustments, including a major shake-up in the financial sector.
One area where these reforms have had a particularly notable impact is Nigeria’s capital market.
Capital Market Momentum Under Tinubu
In just two years, the Nigerian capital market has experienced an extraordinary surge, recording gains of approximately 110 percent. This bullish run, despite wider macroeconomic turbulence, has caught the attention of financial analysts and investors both locally and internationally.
Often described as a mirror of the broader economy, the capital market serves not only as a barometer for investor sentiment but also as a critical driver of private capital formation and financial intermediation. The market’s response to Tinubu’s reforms indicates a complex but largely optimistic outlook from institutional investors and the financial community.
Investor Confidence Amid Economic Challenges
Despite the inflationary pressures and public discontent triggered by policies such as the removal of subsidies and the naira float, investors appear to have taken a medium- to long-term view of the economy. Rather than retreat, they have reinforced their positions, anticipating eventual macroeconomic stabilization and growth.
Supporters of the Tinubu administration point to this as evidence that the President’s “Renewed Hope” agenda is already taking root in key financial sectors. They argue that while the general population grapples with economic hardship, the capital market’s performance reflects a vote of confidence in the structural reforms being implemented.
Regulatory Reforms and Institutional Strengthening
Another contributing factor to the capital market’s performance has been the Tinubu administration’s focus on institutional capacity. One of the President’s early actions was to reconstitute the board of the Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator. The new leadership blends technocratic insight with market experience, setting a reformist tone for capital market governance.
The administration’s push culminated in the signing of the Investment and Securities Act (ISA) 2025, which repeals the ISA 2007 and introduces far-reaching provisions intended to modernize the regulatory framework. Market watchers believe the new law is a game-changer, potentially unlocking new instruments, enhancing investor protections, and bolstering transparency.
How the Market Reflects Economic Policy
The capital market is inherently reactive to policy shifts. It digests emerging trends, assesses risks, and prices in future expectations with remarkable speed. Yet it is also self-correcting—emotional swings are often tempered by data and analysis. In that sense, the market seldom tolerates misinformation or sentimentality for long.
The strong capital market performance over the past two years suggests that the policy direction of the Tinubu administration has been perceived, at least by investors, as forward-looking and growth-oriented—even if painful in the short term.
The Questions That Remain
As Nigeria marks two years under President Tinubu’s leadership, key questions arise for the future of the capital market and the broader financial sector:
- How sustainable is the current momentum in the Nigerian capital market?
- Will the reforms lead to deeper, more inclusive capital markets that benefit a broader base of Nigerians?
- Is the stock market’s optimism grounded in real sector fundamentals—or is it an anticipatory bubble?
- Can Tinubu’s administration continue to strengthen regulatory institutions and investor protections?
Ultimately, while the verdict remains open, the Nigerian capital market has delivered a powerful early signal: it is leaning into the Tinubu reforms, and for now, it appears to be betting on their long-term success.
