Shareholders have raised concerns over the persistent structural challenges in Nigeria’s business environment, saying they must be urgently addressed to prevent the exit of listed firms from the stock market.

They warned that unless urgent reforms are implemented, more firms will delist, which will weaken investor confidence and limi

t opportunities for capital formation.

This followed MRS Oil Plc’s announcement that it would voluntarily delist from the Nigerian Exchange Limited (NGX) and transition its shares to the NASD OTC Securities Exchange.

The move had been in the works for some time but recently received shareholders’ approval at a court-ordered meeting last year. For many investors, the delisting of MRS Oil, one of the top 50 most valuable stocks on the NGX with a market capitalisation of N60 billion, further underscores the growing worrisome trend.

The company’s share price has fallen by 19.7 per cent in 2025, ranking it among the weakest performers on the exchange this year, following the plan. President of the Independent Shareholders Association of Nigeria (ISAN), Moses Igbrude, expressed deep concern over the rising number of delisted firms, arguing that it reflects a deeper systemic challenge.

He pointed out that economic uncertainties, regulatory burdens, and a lack of incentives for listed companies are discouraging firms from staying publicly traded.

Igbrude urged the Federal Government, the Securities and Exchange Commission (SEC) and the NGX to take decisive steps to reverse the trend. He called for policies that would make the listing more attractive, including tax incentives and financial benefits that would give publicly traded firms a competitive edge over private companies.

According to him, without these incentives, more companies will opt for delisting, further diminishing the vibrancy of Nigeria’s capital market. MRS Oil is not the only company to exit the NGX in recent times. The Guardian had reported last year that CAP Plc and UACN were also planning to delist.

This exodus is part of a broader trend, with over 20 companies leaving the NGX in the past decade and several more announcing their exit plans in 2024 alone.
For many of these firms, economic instability has been a major factor in their decision to delist. Fluctuating foreign exchange rates, persistent inflation and rising operational costs have put significant pressure on profit margins.

The depreciation of the naira, in particular, has had a severe impact on businesses with foreign obligations or import-dependent operations. Many firms see delisting as a strategic move to restructure their operations without the volatility and scrutiny that come with being publicly traded.

Another key issue driving companies away from the stock market is the high cost of compliance. Listed firms are required to meet stringent financial reporting, corporate governance, and disclosure requirements, all of which demand substantial financial and human resources. For businesses struggling to manage costs, remaining listed often seems more like a liability than an advantage.

Investors, particularly minority shareholders, are among the most affected by the delisting. When a company exits the NGX, shareholders are left with limited options, either selling their shares before the delisting or holding onto them if the company transitions to an over-the-counter (OTC) market like NASD.

However, OTC markets typically have lower trading volumes, making it more difficult to buy and sell shares at favourable prices. In many cases, exit prices offered to minority shareholders are seen as unfair or below market value.

An independent investor, Amaechi Egbo, called on regulators to urgently address the issues making the NGX less attractive. He emphasised that reducing compliance costs, improving market liquidity, and stabilising foreign exchange policies should be top priorities. Egbo added that strengthening corporate governance and investor protection measures would also help restore confidence in the market.

The continued delisting of companies threatens to weaken the NGX’s role as a primary source of capital for businesses, further reducing investment opportunities for both local and foreign investors.

While delisting may provide companies with short-term relief from regulatory and economic pressures, the long-term impact on Nigeria’s financial sector is concerning. The stock market is meant to serve as a bridge between businesses and investors, facilitating capital raising and economic growth.