The Chairman of the Senate Committee on Capital Market and Institutions, Senator Osita Izunaso, has called for sustained legislative reforms and stronger parliamentary oversight to position Nigeria’s capital market as a major driver of long-term economic growth, infrastructure financing and private sector development.

Speaking in his inaugural fellowship lecture titled “Legislative Leadership and Capital Market Development in Nigeria: Strengthening the Legal Framework for Economic Transformation,” Izunaso argued that while regulators and market operators manage the day-to-day activities of the market, its long-term success ultimately depends on a robust legal and institutional framework enacted by the National Assembly.

He described the recently enacted Investments and Securities Act (ISA) 2025 as the most significant overhaul of Nigeria’s capital market legislation in nearly two decades, saying the law modernises the country’s securities market by strengthening investor protection, expanding the enforcement powers of the Securities and Exchange Commission (SEC), recognising digital assets and virtual asset service providers, and aligning Nigeria’s regulatory framework with global best practices.

According to the senator, Nigeria’s ambition to build a diversified and globally competitive economy cannot be realised without an efficient capital market capable of mobilising long-term domestic and foreign investment.

He noted that beyond financing governments and corporations, the capital market has become increasingly important for infrastructure development, pension fund investment, wealth creation and sustainable finance, particularly at a time when governments face fiscal constraints and widening infrastructure deficits.

Izunaso stressed that legislative intervention goes beyond passing laws to include oversight of regulators, budgetary support, stakeholder engagement and periodic reviews of financial sector legislation to ensure the market keeps pace with technological innovation and evolving global financial trends.

He identified rapid developments in financial technology, artificial intelligence, digital assets, cybersecurity, climate finance and cross-border investment as emerging issues that require continuous legislative attention.

While acknowledging the progress recorded by Nigeria’s capital market through electronic trading platforms, digital settlement systems and the expansion of institutional investors, particularly pension funds, the senator warned that retail investor participation remains relatively low due to limited financial literacy, weak investor confidence and inadequate awareness of investment opportunities.

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He also highlighted macroeconomic challenges, including inflation, exchange rate volatility, high interest rates and global economic uncertainty, as factors affecting investor confidence and capital formation.

According to him, cybersecurity has become another major concern as increasing digitisation exposes exchanges, brokers and other market participants to cyberattacks, data breaches and operational risks, making stronger legislative support for digital resilience essential.

Izunaso further called for deeper product diversification through the development of corporate and municipal bond markets, derivatives, exchange-traded funds, infrastructure funds and financing mechanisms for small and medium-sized enterprises to broaden investment opportunities and improve market liquidity.

Drawing lessons from the United States, India and South Africa, he said successful capital markets are built on dynamic legislation, independent regulators, strong investor protection and continuous legal reforms that adapt to technological and market changes.

To consolidate the gains of the ISA 2025, Izunaso recommended periodic legislative reviews of Nigeria’s securities laws, stronger oversight of the SEC and other market institutions, timely issuance of subsidiary regulations, broader investor education, enhanced corporate governance standards and policies that encourage women, youths and small businesses to participate in the capital market.

He added that the National Assembly should continue positioning the capital market as a strategic tool for financing infrastructure, promoting sustainable investment, supporting innovation-driven enterprises and advancing regional market integration under the African Continental Free Trade Area.

“The enactment of the Investments and Securities Act 2025 has provided a modern legal foundation, but its enduring success will depend upon sustained legislative commitment to innovation, effective oversight, institutional strengthening and policy consistency,” Izunaso said.