SEC raises concern over low participation in the capital market despite massive crypto activity

The Securities and Exchange Commission (SEC) has revealed that over $50 billion worth of cryptocurrency transactions were conducted in Nigeria between July 2023 and June 2024, underscoring the country’s growing prominence as one of the world’s most active digital asset markets.

The disclosure was made by the Director-General of the SEC, Dr. Emomotimi Agama, in a public notice released on Sunday, where he expressed concern over the declining participation of Nigerians in the traditional capital market despite their strong appetite for risk-taking through crypto and gambling.

Low Participation in Traditional Markets

Agama noted that only about 4% of Nigeria’s adult population currently invests in the formal capital market, describing the figure as “a major impediment to economic growth and capital formation.”

While fewer than three million citizens have invested in the stock market, he said, over 60 million Nigerians actively engage in gambling daily, collectively spending an estimated $5.5 million per day.

“This reveals a paradox,” Agama said. “An appetite for risk clearly exists, but not the trust or access to channel that energy into productive investment.”

Economic Disparities and Missed Opportunities

The SEC chief highlighted that Nigeria’s market capitalisation-to-GDP ratio stands at just 30%, far below comparable emerging economies such as:

• South Africa – 320%
• Malaysia – 123%
• India – 92%

He said this disparity demonstrates the urgent need to deepen financial inclusion, rebuild investor confidence, and align financial innovation with national development priorities.

Infrastructure Financing Gap

Agama further noted that Nigeria’s annual infrastructure deficit of about $150 billion dwarfs the contributions from the capital market, with only ₦1.5 trillion approved in Public-Private Partnership (PPP) bonds.

“This shows a misalignment between financial innovation and national priorities,” he said, adding that a vibrant and inclusive capital market could serve as a powerful tool for sustainable development.

Call for a Reimagined SEC

To address these challenges, Agama called for a “reimagined SEC” that functions not only as a regulator but also as an enabler of private-sector-driven economic growth.

He emphasized the need to create policies that bridge the gap between innovation and regulation, allowing Nigeria to harness the potential of cryptocurrency and fintech while ensuring investor protection and market stability.

Cryptocurrency in Africa

Nigeria remains one of six African countries where cryptocurrency trading is legal and regulated, alongside South Africa, Kenya, Ghana, Botswana, and Mauritius. Despite previous restrictions, the growing volume of crypto transactions reflects Nigerians’ strong embrace of digital finance as an alternative to the formal banking and investment system