Stakeholders have expressed frustrations over high trading costs at the Nigerian Exchange (NGX) fees at the Central Securities Clearing System (CSCS), as well as banking charges and deductions.
Adding to withholding tax deductions and poor services, customers are crying foul, for which some analysts see the possibility of impacting negatively the financial services sector, regarded as the bedrock of the economic growth.
Specifically, high bank charges, multiple taxes, fees and poor infrastructure are major concerns for Nigerian businesses and individuals.
Metrobusinessnews.com (MBN)) checks revealed that most respondents identified excessive bank charges as a key obstacle to business growth, even as customers are frustrated with hidden fees, including account maintenance, transfer charges, and SMS alerts.
The Electronic Money Transfer Levy (EMTL) of N50 on transfers above N10,000 as well as the current witholding tax even on fixed deposits as well as investments in Treasury Bills have become grave concerns and also adding to the burden of customers.
Beside the daily deductions, banks charge accumulated deductions even for unsolicited services, such as SMS alerts, among others.
Analysts say the situation could negatively impact the banking sector and Capital Market, ultimately affecting the economy. Analysts warn that rising charges as well as onyroduction of new fees might push people towards informal cash transactions, undermining financial inclusion policy of the Central Bank of, (CBN).
Similarly, some analysts say, among the thriving stock markets in Africa (Cairo, Johannesburg, and Nigeria), the NGX is the most expensive.
The Johannesburg Stock Exchange (JSE), they argue, is approximately 75 percent cheaper than the NGX.
According to Victor Ogiemwonyi, retired Investment Banker, the major factor in the efficiency of a stock exchange is how “frictionless” it is.
In a recent article, published by MBN, ‘Can NGX Trading Cost Be Lowered?’ Ogiemwonyi posited that higher transaction costs would drive the small retail investors, thereby denying the full participation of investors, making the market less competitive and inclusive with the attendant negative impact on the economy.
“A major factor in the efficiency of a stock exchange is how “frictionless” it is. A frictionless market is a theoretical ideal characterized by near-zero costs, perfect information flow, and deep liquidity. In such a market, investors can buy or sell any volume of shares without significantly moving the price—a dynamic that prevents bubbles, removes short-selling constraints, and eliminates settlement delays. While these perfect conditions do not exist in any real-world market, they serve as a vital benchmark. Modern technology has already helped dismantle many traditional barriers; today, information flow is near-perfect, allowing a small retail trader to access the same data as a major hedge fund manager. Improvements in transaction speed and shorter settlement cycles
(the recent shifting from T+3 to T+2) have further enhanced market efficiency.”
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On the barrier posed by high cost and stagnant turnover, the investment banker wrote: “A significant component of a frictionless market is the cost of trading. On the Nigerian Exchange (NGX), trading costs include regulatory fees (SEC, NGX, and CSCS charges), brokerage commissions, VAT, and Stamp Duty. When combined, these costs create a massive hurdle for profitable trading.
High-cost markets discourage retail investors, who are often priced out or forced into “buy-and-hold” strategies just to break even. Furthermore, Foreign Portfolio Investors (FPIs) are highly sensitive to transaction costs and tend to bypass expensive markets. Currently, a typical trade on the NGX requires a 4.5% margin just to break even. This is a major deterrent. Despite massive growth in market size and turnover, driven lately by currency devaluation and inflation, the frequency of trading has remained flat. Investors simply find it unprofitable to move in and out of positions frequently. Among the top three stock markets in Africa (Cairo, Johannesburg, and Nigeria), the NGX is the most expensive. The Johannesburg Stock Exchange (JSE) is approximately 75% cheaper than the NGX. While operating costs in Nigeria are admittedly high, the wide gap between the NGX and JSE explains why foreign investors prioritize South Africa. For Nigeria to grow its market and attract more listings, trading volumes and liquidity , it must become more competitive.”
Noting the possibility of lowering trading costs he added, “While brokerage commissions (around 1.35%) are often discounted to 0.5%–1.0% by Stockbrokers looking to encourage volume, regulatory charges remain rigid. By cutting these fees by 50%, regulators could trigger the Laffer Curve effect: lower tariffs lead to higher activity. A reduction in fees would likely double or triple trade volumes, ultimately increasing total revenue for the regulators. Stamp Duty should be eliminated, especially since the government now enforces Capital Gains Tax. Removing this layer of friction would encourage higher trading frequency, which in turn increases government receipts through VAT and Capital Gains Tax.”
He said the NGX has made significant technological strides over the last decade, even as many of those initial infrastructure costs have long been amortized that should encourage both the NGX and the CSCS to reduce their charges while remaining profitable.
“To compete within the African space and attract the capital necessary for a $1 trillion economy, the NGX must prioritize growth through competitiveness. Reducing the friction of trading is the most critical step towards that future,” Ogiemwonyi stated.
Few days ago, the Central Securities Clearing System (CSCS) commenced implementation of a sweeping overhaul of its fee structure for 2026 with significant upward reviews of fees and charges, in what it describes as marking a decisive shift toward institutional clients, value-based pricing, and significantly higher transaction charges across key services.
The charges, which affect everything from account onboarding to fixed income trading, signal a strategic shift designed to boost revenue and better align fees with transaction value and market activity, according to CSCS reckoning.
Regrettably, some charges have surged by over 3,000%, while entirely new service categories—such as API monetisation and investor segmentation tiers—have been introduced.
The most dramatic changes are concentrated in fixed income services and custodial operations, underscoring CSCS’s focus on high-value, high-volume market segments.
The analysts further observe that although the true cost of some of the digital transactions go unnoticed, considering the smaller amounts, like the N10 charge here, a N50 debit there, or the subtle percentage deducted from foreign transactikns, and even the alerts deductions, the repeated daily, weekly, and monthly deductions, accumulate into significant financial leakages and strains on customers and consumers.
A struggling entrepreneur, who relies on mobile transfers for her daily business told MBN that estimated bank charges and SMS alerts sum up to thousands of Naira at the end of every month.
” This is in addition to N50.00 stamp duties ;N25.00 debits on Commission on NIP Transfers, among others that come in indiscriminately. With high inflation, low disposable income and general hardship, these deductions are killing,” she said.