By Chukwuma Umeorah
The Securities and Exchange Commission (SEC) has identified Venture Capital (VC) and Private Equity (PE) as essential drivers for Nigeria’s economic future, emphasizing their role in catalyzing growth in emerging sectors and empowering entrepreneurs. The Commission noted that strengthening regulatory frameworks for these investment vehicles will attract local and international investors, injecting much-needed capital into the Nigerian economy.
Venture capital and private equity are forms of investment aimed at providing funding to businesses, particularly those that are either new or in early stages (VC) or established companies needing expansion capital or restructuring support. Venture capital typically involves investors supplying financial backing to startups or small businesses with high growth potential, often in exchange for equity or partial ownership. Private equity, on the other hand, involves investment in more mature companies, where investors buy stakes or even full ownership to enhance the company’s value through operational improvements before eventually selling their stakes for profit.
Speaking at the Institute of Capital Market Registrars (ICMR) annual conference in Lagos, SEC Director-General, Emomotimi Agama, highlighted the Commission’s commitment to strengthening regulatory frameworks to attract potential investments and foster economic stability. “By channeling our resources into Nigerian enterprises, we lay the groundwork for a sustainable, resilient growth model. When Nigerians invest locally, we are investing in the future of our nation,” he stated, stressing that local investments are key to reducing economic vulnerability and building financial self-sufficiency.
Agama further emphasized the critical role of the capital market in fostering wealth creation and economic stability, noting that the capital market is “the backbone and barometer of a healthy economy.” He added that SEC, along with institutions like ICMR, plays a vital role in shaping a stable economic landscape. “The capital market is a powerful tool in achieving stability and fostering wealth for all Nigerians,” he said.
Highlighting the importance of domestic savings in driving economic growth, Agama stated, “A resilient economy is anchored by its ability to turn domestic savings into investments that stimulate growth. Investing in Nigerian companies minimizes reliance on foreign capital and builds self-sufficiency, which is critical in times of global uncertainty.”
He explained that the capital market transforms savings into resources that build businesses, support infrastructure projects, and stimulate economic activities. “By providing a structured environment for individuals and institutions to invest their savings, the capital market transforms these idle funds into resources that build businesses, support infrastructure projects, and stimulate economic activities,” Agama said, underscoring that this process of channeling savings into productive investments helps create wealth, job opportunities, financial inclusion, and economic stability.
According to Agama, Nigeria, as one of the largest economies in Africa, has faced significant challenges in recent years, including the decline in oil prices, inflationary pressures, and currency fluctuations, all of which have tested the nation’s economic resilience.
“When we discuss stability for Nigeria, it encompasses more than merely maintaining steady financial systems. Stability is about creating a secure environment in which businesses, investors, and everyday Nigerians can confidently shape their futures,” he explained. “The capital market is the backbone and barometer of a healthy economy, and it plays a critical role in fostering wealth creation. It is a powerful tool in achieving stability and fostering wealth. As Nigeria develops its financial infrastructure, agencies such as the SEC and institutions such as the ICMR are instrumental in shaping a stable economic landscape.”
Agama also called for modernization of the capital market through technology and innovation. “A robust capital market must embrace modernity through technology and innovation,” he stated, emphasizing that integrating fintech solutions would make the market more accessible and resilient. Noting Nigeria’s youthful, tech-savvy population as an asset, he added, “We must align market innovations and product development with local needs to fully harness our demographic dividend and make financial inclusion a reality for all Nigerians.”
To foster these technological advancements, SEC has implemented regulatory sandboxes for reviewing and registering fintech companies. “Recently, we gave an approval in principle to two companies while we have others in the pipeline,” Agama disclosed, reinforcing SEC’s commitment to creating a secure, innovative environment for businesses, investors, and everyday Nigerians to shape their financial futures.
He concluded by urging stakeholders to work toward building a capital market that drives wealth creation, fosters economic stability, and serves as a source of opportunity and growth for all Nigerians.