Incentives define the depth of a market

Incentives define the depth of a market.

Splitbox Journal • Principle of Capital

Nigeria targets a N750 trillion market cap by 2036. This number is a distraction. Without a shift in why people hold equity, this target represents a liquidity enclosure rather than market growth.

The proposed National Savings Scheme is not a retail tool. It is a precursor to mandatory pension-style allocations. The state needs a mechanism to force domestic funds into state-favored infrastructure.

Investors currently use the equity market as a hedge against Naira depreciation. If the underlying incentive remains currency protection, the market stays shallow. Real depth requires capital to seek productive expansion, not just a place to hide from the central bank.

Evaluate the new savings framework as a forced-liquidity tool. It is designed to trap institutional capital in domestic assets. A N750 trillion market cap in 2036 may represent zero real growth if the currency continues its current trajectory.

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— Splitbox Journal