The Nigerian Stock Exchange (NSE), with a market capitalisation of over ₦23 trillion, is Nigeria’s leading capital market platform, providing stakeholders with a reliable and efficient exchange hub to save and access capital. For Oscar Onyema, the NSE’s CEO, maintaining market integrity and investor confidence in a digitised world is key to driving resilience in an uncertain macroeconomic landscape.

“I am confident in the growth prospects of the Nigerian economy,” he says. “However, the major challenges that need resolution include ensuring the country’s oil output targets of over 2 million barrels per day are met, given the relative stability of oil prices at between $60–70 per barrel, and the general insecurity issues.

“The security challenge is a symptom of a deeper problem – the population is growing faster than the economy. This is hampering efforts to provide infrastructure, education and other ingredients for a productive and high quality population.”

The Nigerian equities market has largely experienced a bearish turn over the past 12 months, with the All Share Index declining by over 8,500 points, indicative of negative market sentiments over this period. “Our business is closely correlated with the economy, which in turn is highly correlated with oil prices and output,” Onyema explains. “So, the equities market has mirrored recent economic struggles, especially during periods of uncertainty in oil prices and local production.”

Demutualisation still remains a key strategic priority for the NSE and it is expected to contribute to a more dynamic, transparent and efficient capital market. The exercise should also increase the agility of the NSE and its ability to innovate. “The demutualisation exercise will give us the flexibility to undertake more innovative initiatives,” Onyema says. “Our revenue sources are consolidated around our core areas of trading and listing, and these have largely stagnated. There is an imperative for us to diversify, especially the marketing aspects.

“I see digital disruption as an opportunity here, not necessarily in trading, as trading technologies have evolved so much that there are only marginal gains, but in the listing and marketing aspects of our business. For listing, we are exploring new initiatives around cloud technology, ramping up our capacity and developing new partnerships. For our market data products, we are exploring the use of technology to better understand our customers and service them better without violating their privacy, in the light of new legislations such as the EU GDPR.”

According to Onyema, navigating the critical operational and reputational risks will be key to maintaining business resilience and retaining the confidence of key stakeholders. “Operational risk is always a priority for us,” he says. “At the NSE, we strive to establish very strong governance, policies and systems because the service we provide relies on trust. Our systems and processes therefore must not fail otherwise trading is compromised.

“Reputational risk is another major area; investors and stakeholders must have the confidence in the fairness and credibility of our platforms. They must be able to rely on these platforms at all times, whether they are trading or listing.”

Throughout this document, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International. 

The views and opinions expressed herein are those of the interviewees and survey respondents and do not necessarily represent the views and opinions of KPMG International or any KPMG member firm.  KPMG’s involvement is not an endorsement, sponsorship or implied backing of any company’s products or services.