Nigeria’s sweeping recapitalisation drive across banking, insurance and pension fund sectors is expected to unlock deeper liquidity, attract more investors and strengthen the equities market — not drain it — according to capital market experts.
Speaking at the Arthur Steven Asset Management Webinar Series, ASAM CEO Tunde Amolegbe said fresh capital raising would ultimately expand the pool of tradable shares and boost market depth, especially since many of the affected institutions are listed on the Nigerian Exchange.
“When companies raise capital, investors expect returns. The real question is whether those businesses can justify the new money — and that depends on what happens after recapitalisation,” he said.
Amolegbe added that insurance firms and pension fund administrators, as major long-term investors, will emerge stronger from recapitalisation and deploy more funds into equities, further lifting market activity. “More shares mean more liquidity. That’s a clear positive,” he said.
He also noted that increased equity issuance could help counter long-standing concerns from foreign investors about Nigeria’s shallow market depth.
Backing this view, Nigerian Exchange Group Chairman, Dr Umaru Kwaranga, said recapitalisation would not hurt the market as long as the current buying momentum continues. “There is a lot of money flowing into the market, and once earnings start coming in, investors will sustain this momentum,” he said.
Kwaranga welcomed potential mergers and acquisitions, describing them as a pathway to building stronger institutions capable of competing regionally and globally.
Analysts say if recapitalisation is matched with strong earnings and stable policies, it could mark a turning point for Nigeria’s capital market — deepening liquidity, strengthening confidence and boosting global appeal.
