NGX CEO Temi Popoola speaks to 2023 market outlook

The Nigerian equities market closed the previous year with a remarkable 20% year-to-date performance at the Nigerian Exchange Limited (NGX) in December. As the year turns anew, the local equity market is continuing on a positive trajectory with a 2.7% year-to-date performance. To shed light on what to expect from the market in 2023, Temi Popoola, the CEO of the Nigerian Exchange Limited, recently shared insights and plans for the year ahead in an exclusive interview with CNBC Africa. Popoola highlighted several key priorities and strategies that the NGX will be focusing on to drive market growth and development in 2023. One of the main focus areas for the NGX in 2023 is to position the capital market as a key platform to address various challenges facing the economy. Popoola emphasized the importance of leveraging the capital market to increase tax collection, citing that currently, only 6% of the country's GDP is collected as taxes. By encouraging more listed companies to participate in the market, the NGX aims to boost tax revenues through regulatory mechanisms. Additionally, the exchange plans to facilitate government equity divestments and asset sales to enhance revenue generation. Another critical objective for the NGX this year is to tackle longstanding market challenges, such as driving more listings and deepening trading activities. The recent approval of technology for growth by the Securities and Exchange Commission (SEC) sets the stage for the NGX to attract tech companies to raise capital through the market. Furthermore, strategic partnerships with free zone entities and regulatory collaborations are expected to facilitate the listing of companies within these zones, thereby expanding capital formation. Popoola also highlighted the importance of attracting retail investors to the market by improving investor education, data dissemination, and margin trading. In addition to domestic market initiatives, the NGX is keen on attracting foreign capital back to the market. Popoola expressed optimism about the potential for increased foreign investment inflows and emphasized the importance of fostering strong partnerships across the continent. Collaborations to enhance trading activities within Africa and a focus on sustainability initiatives, aligned with UN Sustainable Development Goals (SDGs), are also part of the exchange's agenda for 2023. As the Nigerian Exchange continues its efforts to broaden its sector representation, Popoola acknowledged the progress made in diversifying listed companies beyond the traditional financial and industrial sectors. While noting the historical sector concentration in financial services and industries like banking and telecommunications, Popoola highlighted recent listings like Vasta Energy and Bua Foods, which have contributed to a more balanced representation of the economy. The agriculture sector, perceived as underrepresented, is also a target for increased listings, with the NGX actively engaging companies in this space to join the exchange. In conclusion, Temi Popoola's strategic vision for the Nigerian Exchange Limited in 2023 aims to leverage the capital market as a catalyst for economic growth, foster diverse sector representation, attract domestic and foreign investment, and promote sustainable market practices. With a strong focus on innovation, collaboration, and market development, the NGX is poised to navigate the evolving market landscape and drive continued growth in the year ahead.