Business
Challenges Of Nigerian Capital Market In 2009
In the annals of the Nigerian Capital Market, year 2009 will remain indelible due to its dismal performance. The banking reforms, global financial meltdown, change of leadership of the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) policies and counter policies within and outside the market inter alia are some of the factors that would make 2009 not to be forgotten in a hurry by many investors and even market operators. These factors made the market to remain on a free-fall during the year under review.
For investors in the market, it was an unpalatable year as by mid December 2009, average year-to-date return at the market stood at a negative of 35 per cent, an extension of the average drop of 46 per cent recorded in 2008.
This implies that an average investor with portfolio spread across the market recorded more than 35 percent loss in its market value during the period. And for those that invested in financial stocks had an average of more than 44 percent; those in the insurance were the worst hit with an average loss of about 64 percent while petroleum stocks generally lost some 61 percent.
A look at the activities in the market showed that within 11- month period ended November 30, 2009 it recorded a turnover value of N638.11 billion as against N2.33 trillion recorded in the comparable period of 2008 indicating a drop of N1.7 trillion or 73 percent.
During the same period, the market turned over a total volume of 95.3 billion units of shares compared with a turnover of 183.45 billion units of shares traded in the corresponding period of 2009. This represents 48 percent decrease in the market turnover during the review period.
The two key indicators for corporate market performance, the all share index and aggregate market capitalisation were also in tailspin. The benchmark index, all share index of the Nigerian Stock Exchange (NSE) closed at 20,795.49 basis points as at December 11, 2009 compared with an opening of 31,446.96 basis points at the beginning of the year indicating a drop of 33.86 per cent.
Also, the aggregate market capitalisation of listed equities which opened trading for the review year at N6.957 trillion fell to N4.990 trillion as at December 11, 2009 indicating a drop of 28.77 percent.
Indeed, the year, 2009 was a bad bargain for investors at the capital market as return on investment (ROI) which come in form of dividend dropped by 65 per cent from N280 billion out in 2008 to N98 billion so far.
The sweeping banking reforms exercise by the CBN, according to market analysts has been the main cause of the prolonged dominance of the bears as it has worsened liquidity crunch and hightened tension in the market.
Many investors as a result took solace in the bond market with minimal risk. In addition to this is the full disclosure policy by the CBN which mandates banks to make public their exposure to toxic loans and assets and make adequate provision for their repayment.
Most of the banks declared losses as the loan provision took toll on their performance while only a hand full made marginal profit.
Analysis of the market performance before the banking reforms revealed that in the first quarter, the market fell by 34 percent as the market indicators, all share index closed trading at 19,851.89 points on March 30, 2009 compared with an opening points of 31,450.78 basis points while the market capitalisation dropped from an opening figure of N6.96 trillion to N4.48 trillion.
There was a turn of event in the second quarter as the market indicators tilted northward with the market capitalisation surging by 33.71 percent to close at N5.99 trillion even as the bench mark index grew by 32.23 percent to close at 26,249.28 basis points.
The indices moved southwards in the third quarter as the market capitalisation declined by 14.36 percent to finish at N5.13 trillion while the all share index went down by 15.94 percent to close at 22,065.00 basis points.
From the fourth quarter to November 30, the market capitalisation decreased 2.57 per cent to close at N4.99 trillion while the index stood at 21,010.29 basis points representing a drop of 4.78 percent.
Ironically, many emerging and advanced stock markets world wide have taken the path of recovery as many have recorded double-digit positive year-to-date returns.
In United States of America for instance the Dow Jones Industrial Average posted a positive year-to-date return of about 19 percent according to reports. The Standard and Poor’s 500 index recorded 22 percent while the Nasdaq gained 39 percent.
The United Kingdom’s FTSE 100 index posted more than 18 percent bench mark return while the CAC 40 index, a major gauge of the French market had 18 percent return.
Others are Germany’s DAX Index, 19 percent, South Africa’s YSE All – Share Index 25 percent, Japan’s NIKKEI 225 Index, 11 percent and India’s BSE 30 Index with a shooping bench mark return of 78 percent.
In spite of the many weaknesses, there is silver linings for the market. But this can only be manifest when a concrete step is taken towards the reality of the take-off of market markets, the new rules on share buy back, reduction in costs of transactions, comprehensive periodic reporting requirements, publication of periodic forecasts of quoted companies, a strict regulatory surveillance by both NSE and SEC among others that would reinforce investors confidence in the market.
The delisting of inactive companies from the Exchange by the NSE will go a long way to help the market and the introduction of rules to check the inefficiencies in the primary market especially in private placement.
The Minister of State for Industry, Trade and Investment, John Enoh said this at the 8th annual induction and conference of the Chartered Institute of Project Managers of Nigeria (CIPMN).
He explained that abandoned projects continue to lock up public funds that could have been used for infrastructure development, industrial growth, job creation and essential social services.
Represented by the ministry’s Permanent Secretary, Chris Osa Isokpunwu, he said the impact goes beyond financial losses, as incomplete projects affect communities and limit access to important public services
He cited examples of that remain unopened, schools that cannot accommodate students, roads that fail to connect communities and electricity projects that have not delivered their intended benefits.
The Registrar-General and Chief Executive Officer of CIPMN, Henry Ifeanyi Mbadiwe, also identified poor project management as a major challenge affecting development in Nigeria.
He revealed that the institute had developed a project management curriculum for Nigerian universities, which has received approval from the National Universities Commission (NUC). The programme is expected to enable universities to offer project management as a bachelor’s degree.
Mbadiwe further referenced findings by the Presidential Projects Assessment Committee, which identified 11,886 ongoing federal capital projects in 2011, with an estimated financial commitment of ?7.78 trillion.
He noted that inadequate planning, supervision, accountability and implementation were among the factors contributing to the abandonment of projects across the country.
The minister called for stronger project management structures across ministries, departments and agencies to improve planning, monitoring and evaluation.
He added that the Federal Ministry of Industry, Trade and Investment had introduced a 90-day implementation reporting cycle to strengthen transparency and monitor the progress of government programmes.
Ikenga said the company remained committed to Nigeria’s power sector and would continue investing in its operations despite the challenging business environment.
He spoke in Lagos at the third edition of the Shell Power Conference, themed “Powering Nigeria’s Progress: Turning Ambition and Action into Sustainable Impact”.
The Transcorp Power chief said the company would sustain electricity generation, invest in its facilities and deliver value to shareholders.
“Transcorp Power is a long-term player, not a short-term player. This year has been challenging, but what is important is getting power to schools, hospitals and businesses to power progress,” he said.
Ikenga said the company’s focus on operational efficiency and investment had strengthened its contribution to Nigeria’s electricity supply.
He disclosed that since acquiring the Ughelli Power Plant in Delta State in 2013, Transcorp Power had quadrupled its available generation capacity.
He also said the company became the first privatised power generation firm to receive a post-privatisation discharge certificate after fulfilling all its privatisation obligations.
The company’s unaudited results for the nine months ended September 30, 2026, showed a profit before tax of N83.1 billion, while its profit-before-tax margin rose to 31.2 per cent from 29.6 per cent recorded in the corresponding period of 2025.
Its total assets rose to 11.7 per cent amounting to N629.5 billion, while shareholders’ funds grew 8.9 per cent to N199.8 billion. Cash and cash equivalents also rose to N10.3 billion, supported by improved collections.
On the company’s contribution to grid stability, Ikenga said Transcorp Power’s black-start capability enabled it to restart operations without relying on electricity from the national grid.
He explained that the capability allowed the company to support power restoration following grid disturbances, helping to restore electricity supply to homes, businesses and industries.
Ikenga noted that Nigeria had an installed electricity generation capacity of about 13,000 megawatts, with an estimated potential of 50 gigawatts, adding that realising the potential would require effective coordination across the entire value chain.
“Everything in the value chain has to work,” he said.
He called for stronger collaboration among federal and state governments, regulators and private-sector operators, alongside increased private investment, to build a sustainable electricity market.
This was contained in a statement issued on Thursday by his Senior Special Assistant on Communications and Press Secretary, Maryann Duke.
The statement said Oyedele pointed to “improved digital systems, including electronic invoicing, as a key driver behind a record of N33tn in government revenue collected between January and October 2026.”
The minister said the performance demonstrated the potential of technology to improve revenue administration, strengthen compliance and increase efficiency across government institutions.
Speaking on the theme, ‘Digital Sovereignty and Ethics: Guarding the Economy for the Next Generation,’ Oyedele warned that Nigeria risked losing substantial economic opportunities if it continued to depend heavily on foreign digital infrastructure.
Citing Nigerian Communications Commission figures, he disclosed that the country recorded more than 157 million active internet subscriptions as of May 2026.
He explained that these connections generated significant volumes of information through financial transactions, healthcare, education and taxation.
However, citing estimates from the Nigeria Data Protection Commission, Oyedele said as much as 90 per cent of the country’s data was hosted abroad.
According to him, the situation has implications for foreign exchange expenditure, employment opportunities, technological skills and Nigeria’s control over information generated by its citizens.
He compared the country’s reliance on foreign digital infrastructure with its historical dependence on imported refined petroleum products, warning against a situation where Nigerian data would be processed abroad and the resulting services sold back to domestic users.
The minister consequently advocated greater investment in local data infrastructure, technical expertise, cybersecurity and predictable regulations to enable Nigerian businesses to capture more value from the digital economy.
He clarified that digital sovereignty should not translate into technological isolation but should strengthen Nigeria’s capacity to participate competitively in international markets.
Addressing graduating students, Oyedele urged young Nigerians to become developers of technological solutions rather than remain primarily consumers of products created elsewhere.
He identified artificial intelligence as both a disruptive force and an opportunity for innovation, advising graduates to acquire relevant digital skills alongside critical thinking, creativity, sound judgement and integrity.
The minister also cautioned against irresponsible online behaviour, explaining that digital footprints increasingly influence employment prospects, commercial relationships and professional credibility.
Oyedele outlined five priorities for graduates, including continuous learning, value creation, integrity, responsible digital citizenship and active participation in national development.
“Your degree is evidence of what you have learned. Your competence will demonstrate what you can do. Your character will reveal who you truly are,” he told the graduating students.
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