Nigeria’s cryptocurrency dealings have reached unprecedented levels, with transactions exceeding ₦75 trillion ($50 billion) between July 2023 and June 2024, according to Securities and Exchange Commission (SEC) Director-General Emomotimi Agama.
Speaking at the Annual Conference of the Chartered Institute of Stockbrokers, Agama revealed that the booming crypto sector underscores a potent yet misdirected risk appetite among Nigerians, one that poses a direct challenge to the country’s traditional capital market.
“An appetite for risk clearly exists, but not the trust or access to channel that energy into productive investment,”
— Emomotimi Agama, SEC Director-General
A Tale of Two Markets
During his presentation of the lead paper titled “Evaluating the Nigerian Capital Market Masterplan 2015–2025”, Agama noted that while the crypto economy flourishes, fewer than 4% of Nigeria’s adult population actively participate in the formal capital market.
This contrast paints a revealing picture: Nigerians are enthusiastic risk-takers but reluctant investors in structured financial markets.
- Crypto participants: Millions engaging in digital assets worth trillions.
- Capital market participants: Less than 3 million Nigerians.
- Gambling activities: Over 60 million Nigerians wager an estimated $5.5 million daily.
The statistics, Agama argued, reflect a misalignment between risk appetite and financial inclusion. Nigerians are clearly open to speculative ventures, from crypto to betting, yet remain disconnected from the productive investment channels that could drive national development.
A Paradox of Growth Without Inclusion
Agama described the situation as a “paradox”: a population eager to take risks but disillusioned with formal investment platforms.
Despite massive sums circulating in the financial system, Nigeria’s market capitalisation-to-GDP ratio lags behind comparable economies:
- Nigeria: ~30%
- South Africa: 320%
- Malaysia: 123%
- India: 92%
This disparity highlights a severe underperformance in Nigeria’s capital markets. Vast financial flows are bypassing the formal ecosystem, leaving infrastructure, startups, and enterprises undercapitalised.
Capital Market Masterplan Faltering
The Capital Market Masterplan (CMMP) 2015–2025, envisioned as a ten-year roadmap for growth and investor confidence, has achieved fewer than half of its 108 planned initiatives, according to Agama.
He cited three key obstacles:
- Weak alignment with national development strategies.
- Poor performance tracking and data measurement.
- Low stakeholder engagement across institutions.
These challenges, he warned, have hindered the capital market’s ability to compete with the agility and accessibility of digital assets like crypto.
Why ₦75 Trillion Matters
The ₦75 trillion crypto transaction volume represents more than just a number, it signifies a shift in financial behaviour.
As inflation, currency instability, and limited investment options push Nigerians toward alternative assets, the crypto ecosystem has become an outlet for speculative growth and financial experimentation.
But without proper integration into regulated channels, this momentum could further divert capital from sectors that sustain long-term economic growth.
The Road Ahead
Agama called for urgent collaboration between regulators, policymakers, and market operators to bridge the gap between Nigeria’s digital and traditional investment spaces.
For the SEC, this means balancing innovation and investor protection, creating frameworks that attract the same young, tech-savvy Nigerians now powering the crypto surge.
If successful, Nigeria could channel this trillion-naira momentum toward productive sectors, helping to revitalise the nation’s underperforming capital market and position it as a genuine driver of inclusive economic growth.
