(Bloomberg) — Nigerians’ preference for plowing their money into gambling and cryptocurrencies rather than the capital market is denying the nation of funds that could be used to build key infrastructure, the head of the financial regulator said.
More than a fourth of the country’s nearly 240 million people are staking a combined $5.5 million daily in gambling, against less than three million investing in the capital market, Securities and Exchange Commission Director-General Emomotimi Agama said in emailed statement. On top of that, many young people with access to digital platforms are piling into cryptocurrencies, with more than $50 billion worth of transactions conducted between July 2023 and June 2024, he said.
Double-digit inflation, an almost 70% depreciation in the naira against the dollar since end-May 2023 and more than one in two Nigerians living in poverty have pushed many to seek ways to make quick money.
Low local investor participation means that the value of listed assets-to-gross domestic product is 30%, compared with South Africa’s that’s more than three times in excess of GDP, Agama said.
That’s “a major impediment to economic growth and capital formation,” and makes it difficult to plug the nation’s annual infrastructure gap of $150 billion, he added. “An appetite for risk clearly exists, but not the trust or access to channel that energy into the productive sector.”
To reverse this trend, President Bola Tinubu earlier this year enacted a new investment and securities law. The law brings other securities such as crypto under regulation, without banning them since they’re already well entrenched in the financial system.
The SEC also said it plans to create new products and deploy technology to attract more investment.
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