Foreign exchange liberalization, tighter monetary policy and increasing transparency have helped Nigeria reemerge as one of the most commercially compelling financial markets in sub-Saharan Africa, according to a new report by Crisil Coalition Greenwich, as improving liquidity and investor participation reshape activity across the country’s FX, bond and equity markets.

Over the last year, liquidity has improved across Africa’s capital markets, supported by reform momentum, improving market structures and a widening institutional investor base. The shift is helping move some markets away from episodic primary issuance toward more sustained secondary trading activity.

Nigeria has emerged as one of the clearest examples of that transition. Stronger foreign portfolio inflows, improving market functionality and a repricing of local risk have combined to support growing activity across the country’s capital markets.

“Nigeria's financial landscape has reached a pivotal inflection point where robust secondary market liquidity is unlocking unprecedented capital-raising potential. Driven by record equity turnover, improved price discovery, and ongoing banking sector recapitalization, the market has shifted from speculative recovery to fundamental growth-offering scalable, repeatable revenue streams across execution, financing and risk transfer,” said Bhavya Ahuja, Vice President for Middle East & Africa on the Competitor Benchmarking Research & Analytics team at Crisil Coalition Greenwich and co-author of “Nigeria’s capital markets: An emerging opportunity.”

The liberalization of Nigeria’s foreign exchange market has played a central role in improving liquidity conditions, increasing turnover and deepening participation in local bonds and equities. The improving liquidity environment has also supported stronger price discovery and increased demand for hedging instruments.

Nigeria’s local bond market has become increasingly tradable as yields compress and confidence improves around inflation pricing and policy credibility.

Meanwhile, the Nigerian Exchange is recording higher equity turnover and market velocity, supported by stronger domestic institutional participation and improving foreign investor access. According to the report, deeper liquidity is expanding capital-raising opportunities for corporates.

The report also noted that geopolitical tensions in the Middle East continue to influence investor sentiment and risk pricing across Nigerian assets.

“The current geopolitical environment highlights a dual dynamic for Nigeria—while macroeconomic uncertainty elevates funding costs and market sensitivity to external shocks, it simultaneously sustains investor interest in high-yield government securities within the country’s secondary market,” said Aamir Hazaria, Director, CIB Competitor Benchmarking Research & Analytics at Crisil Coalition Greenwich and co-author of the report.

The report examines developments across Nigeria’s FX, bond and equity markets while also assessing broader revenue opportunities across Africa in fixed income, currencies and commodities (FICC), equities, investment banking, cash management and other business lines.