•Reforms required to reverse trend, says Oyedele
•Nigeria on digital transformation for efficient tax system, FIRS says

Nigeria’s capital market loses an estimated $60 million to crypto and other virtual assets, a trend that could only be reversed with broad-based process reforms, Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, Taiwo Oyedele, has said.

He urged regulators, policymakers and tax authorities to work together to tackle the structural challenges weakening Nigeria’s capital market to bring the huge capital into the market.

Addressing participants virtually at the just-concluded Capital Market Committee (CMC) meeting in Lagos, Oyedele argued that Nigerian youths are investing an estimated $60 million in cryptocurrencies and related digital instruments rather than in productive, regulated investment channels.

According to him, simplifying market access, reducing punitive tax burdens, modernising regulatory frameworks, and introducing youth-focused incentives are critical steps to reversing the trend.

He argued that without deliberate and coordinated actions, the capital market may continue to lose potential long-term investors, especially young Nigerians whose participation is essential for building a stable and resilient investment landscape.

He pointed out that despite the fact that the Nigerian capital market has consistently produced better returns than many crypto assets, youths remain hesitant to enter the market due to limited awareness, lack of targeted incentives and an ecosystem that has not adapted to the digital habits of today’s generation.

Oyedele stated that there is an urgent need to rapidly expand domestic participation in the capital market, with deliberate efforts towards attracting younger investors for the nation to achieve its long-term growth target.

In addition, he noted that the nation’s investment landscape is far too shallow, dominated by an ageing investor base and structural challenges that limit local involvement, especially among young Nigerians who make up the majority of the population.

He pointed out that fewer than five per cent of Nigerians currently participate in the capital market, with only about two per cent classified as active investors.

Oyedele described this as an alarming gap for a country seeking large-scale economic transformation, noting that high interest rates have made traditional borrowing prohibitively expensive for businesses and government alike, leaving the capital market as the most sustainable route for financing infrastructure, innovation, enterprise development and long-term growth.

A vibrant market, he added, is not just an economic tool but a pathway to widespread wealth creation and the emergence of a strong, stable middle class.

Drawing comparisons with global trends, Oyedele noted that the United States has witnessed explosive growth in retail investment participation, with the number of households investing in stocks increasing more than fivefold over the past decade.

Oyedele emphasised that Nigeria’s biggest competitor is not foreign stock exchanges but the unregulated, fast-paced alternatives available within its own borders.

He referenced the Indian capital market as a model where broad retail participation, particularly from young investors, has strengthened market stability and reduced reliance on foreign inflows.

For Nigeria to achieve similar stability, he stressed that local participation must become the backbone of the market.He noted that foreign portfolio investment, while valuable, does not provide the security needed, as such funds are highly sensitive to the global cycle and can exit the market abruptly when triggered by political or economic shocks. Such volatility, he warned, can destabilise the entire system if not balanced by strong domestic investment.

On tax-related challenges, Oyedele criticised the heavy burden placed on Nigerian businesses, noting that many unlisted entities face multiple levies, overlapping charges and mandatory minimum taxes even when they are not profitable.

He argued that when companies are weighed down by such obligations, they are left with little capacity to reward shareholders, reinvest in operations or attract new investors, thereby weakening the overall market performance.

He insisted that comprehensive reforms are necessary to make the capital market more robust, efficient and appealing to both existing and potential investors.

Meanwhile, the Federal Inland Revenue Service (FIRS) said it is betting on digital transformation for an efficient tax administration as it prepares to transition to the Nigerian Revenue Service by January 2026.

Chairman of FIRS, Zacch Adedeji, said this on Wednesday in Abuja at the signing of a memorandum of understanding (MoU) on mutual interests and promotion of efficient tax administration between FIRS and Direction Générale des Finances Publiques (DGFP), the French tax agency.

He said digital transformation is one critical area where Nigeria can leverage France’s advanced use of technology in compliance management, taxpayer services and data-driven enforcement.

Adedeji said the event reflects a shared commitment to building stronger, more resilient and more forward-looking tax administrations for the two countries.

“France will in return, gain fresh perspectives from Nigeria’s rapid digital expansion, our agile adoption of new tools, and the unique solutions we are developing for a fast-growing, technology-driven population,” he said.

He noted that the two-way exchange is essential as both countries adapt to emerging challenges such as Artificial Intelligence deployment, cybersecurity and cross-border taxation.

He said the partnership between France and Nigeria would enable the tax institutions to exchange ideas, share innovations and learn from each other’s experiences.

“Another important aspect is workforce development. While we look forward to learning from France’s well-structured human capital systems, particularly in professional standards, continuous learning, and organisational discipline, we also believe that our experience in managing a young, dynamic and diverse workforce will offer valuable insights to DGFIP.

“Together, we can develop models that strengthen institutional culture, build global competencies, and prepare our respective institutions for the future of public finance administration. We also anticipate strong bilateral cooperation in international taxation, exchange of information, transfer pricing and Base Erosion and Profit Shifting (BEPS) related work,” he said.

The French Ambassador to Nigeria, Marc Fonbaustier, who signed on behalf of DGFP, emphasised the importance of collaboration between the two countries. Nigeria will begin the implementation of a new tax regime with effect from 2026, following the signing of four new tax laws.