Proposal for Establishing a Social Stock Exchange in Nigeria: A Letter to President Bola Ahmed Tinubu

Dear Your Excellency, President Bola Ahmed Tinubu,

I am writing to bring to your attention an innovative concept that has the potential to revolutionize impact investing and financing for social enterprises in Nigeria – the establishment of a Social Stock Exchange.

A Social Stock Exchange is a platform that enables investors to purchase shares/stocks of social enterprises, cooperatives, and non-profit organizations that are dedicated to addressing critical socio-economic and environmental challenges. This platform serves as a bridge between ethical investors who are looking to generate positive social impact alongside financial returns, and mission-driven organizations in need of growth capital.

As Nigeria grapples with significant development challenges such as poverty, unemployment, healthcare, education, and climate change, it is clear that the government alone cannot address these issues. A vibrant social entrepreneurship ecosystem is needed to drive sustainable solutions.

The benefits of a Social Stock Exchange are manifold. It can unlock new funding from impact investors, improve transparency and governance within social enterprises, provide an exit pathway for pioneering social investors, and raise awareness about the social enterprise sector.

Notably, Social Stock Exchanges are already operational in countries like the UK, Singapore, Canada, Jamaica, and Kenya, with the Impact Investment Exchange (IIX) in Singapore raising over $100 million for enterprises addressing UN Sustainable Development Goals. Nigeria should seize the opportunity to join this global movement.

I propose a two-tier structure for the Social Stock Exchange in Nigeria – Tier 1 for highly regulated, publicly tradable shares of mature social enterprises, and Tier 2 for private placement of shares in early-stage social ventures. This model caters to both institutional impact investors and smaller ethical investors, ensuring investor confidence and the credibility of social enterprises through supervised listings and reporting standards.

To bring this vision to fruition, I suggest the formation of a steering committee comprising representatives from the Securities and Exchange Commission (SEC), the Nigerian Exchange Group (NGX), impact investors, and social enterprise stakeholders. This committee can study successful global models, develop a framework for Nigeria’s Social Stock Exchange, secure seed funding, establish governance and trading standards, and ultimately launch the exchange platform.

Your support and leadership in championing the establishment of a Social Stock Exchange in Nigeria would be instrumental in driving positive social impact and economic growth in our country.

Sincerely,

Kabiru Adeniyi Adisa FCA