Nigeria pushes West African bond market integration to unlock infrastructure funding

Nigeria has proposed a set of regional capital market reforms to make it easier for investors to trade bonds across West Africa and unlock long-term funding for infrastructure and growth, Finance Minister Taiwo Oyedele said on Tuesday, November 10, at the S&P Global Ratings Africa Summit in Lagos.

Oyedele said fragmented capital markets across West Africa are limiting access to long-term financing. No single market is deep enough to attract the scale of investment needed for infrastructure and economic growth.

Passport regime and unified investor ID

Nigeria is proposing a regional passport regime. It would allow issuers approved in one participating market to raise capital across others without seeking separate regulatory approvals.

The government is also advocating a unified investor identification system. This would let investors registered in one market buy bonds and equities across the region without repeating onboarding requirements.

Oyedele called for linking regional trading, settlement and payment infrastructure so securities transactions can be settled directly in local currencies. That would reduce reliance on the US dollar.

The plan would cover 10 countries: Nigeria and Ghana, plus eight francophone countries that share the CFA franc and a common central bank. They are Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo.

Building on existing initiatives

Oyedele said existing initiatives provide a foundation for greater market integration. These include the West African Capital Markets Integration Council, the African Exchanges Linkage Project and the Pan-African Payment and Settlement System, PAPSS.

“The task now is to join these pieces together,” Oyedele said.

Additional proposals include creating a regional local-currency bond index and a credit enhancement facility to support cross-border infrastructure financing.

Nigeria's capital market target

Nigeria aims to attain investment-grade credit ratings within three years. It is also targeting a capital market worth at least $1 trillion under a 10-year capital market plan.

Oyedele said the reforms would make Nigeria a more attractive destination for domestic and foreign investors.

For Nigerian businesses and consumers, the push matters because deeper regional bond markets could widen access to long-term naira and local-currency funding. That could reduce pressure to rely on dollar borrowing for infrastructure and corporate investment if the reforms are implemented.