Nigeria’s capital markets are beginning to establish credibility as a viable exit route for institutional investors, the Group Managing Director and Chief Executive Officer of Nigerian Exchange Group, Temi Popoola said, citing recent transactions and structural reforms aimed at improving market function.

“The true test of any market is not entry, but exit,” said Popoola, during a presentation to investors last week.

Nigeria’s markets have historically been constrained by foreign exchange illiquidity, repatriation delays, and limited depth. However, reforms introduced since 2023, including the unification of exchange rates, have improved price discovery and capital mobility, Popoola said.

Domestic investors now account for about 91% of market activity, providing a stable base for liquidity, while foreign participation is beginning to recover selectively as conditions improve.

Recent transactions are also helping to reshape investor perceptions. A divestment by Africa Capital Alliance in Aradel Holdings delivered a 3.4 times dollar return, demonstrating the potential for large-scale exits through the public market, according to the exchange.

“Foreign capital hasn’t disappeared, it has become more disciplined,” Popoola added, noting that investors are re-engaging where there is greater clarity on execution and exit pathways.

Nigeria remains one of Africa’s largest markets, with a population of more than 240 million and total market capitalisation exceeding ₦187 trillion.

Popoola further said that the country’s relevance is increasingly tied not just to its size, but to its ability to intermediate capital through more functional market structures.

While acknowledging that challenges remain, including liquidity concentration and macroeconomic volatility, he said these are transitional rather than structural constraints.

“Nigeria’s markets are not yet frictionless, but they are no longer static,” he said.