Introduction
A recurring theme of doing business in Nigeria is sourcing for the capital required to generate revenue, value and growth. Concerns around conventional lending rates and its prohibitive nature, the floating of the Naira, and the resulting foreign exchange rates has shot up and exceeded most projections. For many businesses, outside the largest corporates, raising finance can feel like an exercise in convincing investors that Nigeria remains investment friendly. This is where the Nigerian capital market is beginning to tell a different and more interesting story.
Nigerian Capital Market Recent Trends
Consider the Nigerian Exchange (the “NGX”). In January of this year, its equity market capitalisation crossed ₦100 Trillion for the first time since its existence. By August 2026, it had risen to over ₦160 Trillion, adding a whopping ₦60 Trillion in nine (9) months. Market capitalisation is not, of course, the same thing as money available to companies, and while a rising share price does not put cash into an issuer’s bank account, it provides a useful indication of the amount of value investors are willing to assign to Nigerian businesses.
Interestingly, very recently on 14th September 2026, Dangote Petroleum Refinery and Petrochemicals opened what is shaping up to become Africa’s largest IPO, offering 4.1 billion shares at ₦525 each, seeking approximately ₦2.15 Trillion. Within hours of the offer opening, the Nigerian Exchange published a live update from its NGX Invest Command Centre reporting 402,634 transactions and a figure of approximately ₦1.476 Trillion. The NGX has since clarified that the transaction figure was incorrectly published and should not be treated as the actual amount subscribed[1], but the episode does not make the underlying point disappear.
The story is not different in the fixed income market, and particularly, the money market. According to the SEC[2], between June and August of 2025, investors deployed ₦683.79 Billion in purchasing commercial papers – and that’s not the full picture till date.
The point is not that capital has suddenly become cheap. It is rather that it is available, and that investors are not afraid to deploy it when the metrics are right. So how do you go about accessing the capital market?
Legal Readiness Check
There is no single formula to raising capital. A company seeking equity is asking investors to participate in its future – its viability, growth potential, and crucially the ability to adapt to changing markets, technologies, and consumer demands. A company issuing debt is asking investors to trust its ability to repay. The metrics are therefore different and indeed varied. There are legal, compliance, operational, and even financial considerations that a company proposing to access the capital market must consider. But the underlying discipline is remarkably similar. These include:
- Know what kind of capital you actually need
Working capital, acquisition finance, refinancing, shareholder liquidity, and long-term growth do not necessarily require the same instrument. For example, a company with short-term financing needs may be better suited to issue commercial papers or other money market instruments, while a financing a long-life asset may need longer-term debt, or even equity.
- Put your House in Order – Ratings
To raise debt capital from the Nigerian capital market, an issuer must satisfy the SEC’s rating requirements. For example, Both Issuers and the instruments to be issued are generally required to obtain and maintain an investment-grade rating, subject to the applicable eligibility and credit-enhancements.
The eventual rating is the outcome of a detailed examination of the issuer and its ability to meet its financial obligations. A rating agency will typically seek to understand the issuer’s business, its financial position and cash flows, its ownership and corporate structure, material contracts, regulatory position, existing obligations and the risks that could impair its ability to repay investors.
Accordingly, a company looking to approach the market should be able to demonstrate that its corporate records and ownership structure are in order, that its material assets, contracts and intellectual property are properly held, and that it remains compliant with any applicable laws and relevant regulations.
- Understand what your Existing Financing Allows you to do
Existing financing arrangements can be just as important to a proposed capital raise as the new transaction documents themselves. Lenders generally seek to protect their capital, and two common ways they do this are through negative pledge and change-of-control provisions.
A negative pledge typically restricts the borrower from raising additional debt financing, or from creating security over its assets in favour of another lender/creditor. This may potentially restrict an issuer from approaching the fixed income market, unless the existing investors waive the restriction. Change-of-control provisions address a different concern. They give an existing lender rights where there is a change in who owns or controls the issuer, which may include requiring consent, triggering an event of default or requiring the existing financing to be repaid. This can become particularly important where a capital raise involves the issue of new shares or a change in the company’s ownership structure.
These are only two examples. Financing documents may also impose additional restrictions including the making of distributions, acquisitions or disposals, amendments to material contracts, or yet other financial covenants. Accordingly, it is prudent for companies looking to approach the capital market to thoroughly review existing financing arrangements to identify what restrictions or limitations are imposed on it, or what consents it would require to be able to raise the proposed capital.
- Be Compliant
Regulatory compliance is non-negotiable, particularly for regulated entities. But even for businesses that are not themselves subject to extensive sector-specific regulation, regulatory matters can have a direct bearing on the value of the business, its ability to operate, and its ability to access institutional funding.
A company proposing to raise capital should therefore undertake a proper review of the regulatory framework applicable to its business and identify the licences, permits, registrations, approvals and consents on which its operations depend. It should establish that these remain valid and in good standing, that material regulatory filings and obligations are up to date, and that there are no outstanding regulatory issues that could affect the business or the proposed transaction.
Any material non-compliance identified should be identified early and, where possible, remedied before the company approaches the market. Where an issue cannot be resolved, it should be properly assessed and adequately disclosed in the relevant transaction documents.
- Prepare to Disclose
Companies looking to access the capital markets are required by the applicable regulations to disclose to investors, not only what is attractive about the business, but also what could go wrong. The relevant offer document and other transaction documents will contain statements about the company’s business, assets, contracts, financial position, regulatory status, indebtedness, litigation and prospects, as well as the risks associated with investing in the instruments. Those statements need to be accurate and complete.
As a company cannot disclose what it does not know, it will need to have a clear understanding of its own affairs before it approaches the market. Accordingly, a proper legal and commercial due diligence exercise should be undertaken early enough to identify the issues that may need to be resolved or disclosed, as the earlier these issues are identified, the more options the company has in determining how to resolve the same or the approach to take it disclosing it.
Where such problem is not disclosed but is subsequently discovered by the SEC or the investing public, this may lead to regulatory sanctions for non-disclosure or misrepresentation, and may potentially impact the approval of the transaction by the relevant regulatory authority.
A company preparing to access the capital markets should therefore be prepared to open its books, understand what is in them, and deal with the issues that emerge before asking investors to put their money behind the business.
Conclusion
The Nigerian capital market is demonstrating that investors are willing to deploy capital where they see an opportunity that is properly structured, sufficiently transparent, and capable of delivering an appropriate return for the risks involved.
The challenge is not simply finding investors. It is preparing to meet them. The companies that are best positioned to access institutional capital will be those that understand what capital they need, have their corporate and financial affairs in order, understand the restrictions imposed by existing financing, remain compliant with applicable regulations and are prepared to give investors a clear and defensible account of the business.
There is money in the market. But access is earned.
[1] https://nairametrics.com/2026/09/14/correction-ngx-says-dangote-refinery-ipo-transaction-figures-were-incorrectly-published/
[2] https://sec.gov.ng/for-investors/keep-track-of-circulars/list-of-approved-commercial-papers-as-at-23-october-2025/