October 23, 2026/CSL Update
Nigeria’s Securities and Exchange Commission (SEC) plans to introduce an African Depositary Receipts (ADR) framework and cross-border listing rules as part of efforts to position the country as a regional financial hub and deepen capital mobilisation. The initiative aligns with the Nigeria Capital Market Masterplan 2.0 (2026–2036) which is designed to support Nigeria’s ambition of building a US$1 trillion economy by 2030.
The masterplan targets a tenfold increase in collective investment scheme (CIS) assets under management to US$56bn from US$5.6bn, while annual diaspora investment channelled through capital markets is expected to rise to US$10bn from US$4bn. It also seeks to increase cross-border listings to 40 from five within the ten-year period.
Under the proposed ADR framework, non-Nigerian African companies would be able to raise local capital through depositary receipts representing shares held in custody, potentially reducing the administrative and regulatory burden associated with direct listings. Streamlined approvals, introductory listing-fee incentives, cross-border settlement/custody arrangements, and a pathway towards full secondary listings are expected to encourage participation.
The proposal also includes recognising combined global shareholder registers when assessing free-float and trading-volume requirements, alongside dual-currency listings to broaden investor access and facilitate regional fundraising. Nigeria’s experience with global depositary receipts (GDRs) and the overseas secondary listings of companies such as Seplat Energy, Guaranty Trust Holding Company, and Airtel Africa demonstrate how international market access can broaden investor reach and foreign ownership.
However, the framework’s effectiveness will depend on harmonised regulation, reliable custody infrastructure, currency-conversion arrangements and investor protection across participating jurisdictions.
Notably, the ongoing initial public offering (IPO) of Dangote Petroleum Refinery and Petrochemicals FZE provides an immediate illustration of the opportunity, with the company pursuing participation across selected African markets through depositary-receipt arrangements.
More of such initiatives could help Nigerian issuers attract a wider pool of continental investors, improve market liquidity, diversify funding sources and reduce businesses’ dependence on bank financing. In addition, increased foreign portfolio inflows could support foreign-exchange liquidity, which, alongside stronger export earnings and sound macroeconomic policies, contribute to greater naira stability.
On another note, the ADR proposal should enable foreign companies to access domestic savings, deepening market activity and strengthening Nigeria’s position as a regional capital-raising destination. Nevertheless, depositary receipts do not automatically guarantee sustained capital inflows; investor confidence, transparent disclosures, competitive listing costs and credible repatriation mechanisms remain essential.
Overall, the SEC’s proposed reforms represent a strategic opportunity to transform Nigeria from primarily a domestic fundraising market into a continental capital-market powerhouse, provided implementation is coordinated, commercially attractive and supported by robust regulatory oversight.