‘Govt should make capital market pivot for national budget‘

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Nigerian governments should make capital market the pivotal point for the development and implementation of national budget and development plans.

Capital market regulators, operators, financial experts and other stakeholders yesterday agreed that the Nigerian capital market has important roles to play in the industrialisation and economic development of the country.

They spoke at the 3rd annual budget seminar organised by the Securities and Exchange Commission ( SEC ).

Acting Director General, Securities and Exchange Commission ( SEC) Ms Mary Uduk said there is a mutually revolving relationship between government policies and economic development and the capital market, noting that government budget affects the economy and the economy in turn affects the capital Market.

She pointed out that both local and foreign stakeholders are interested in the budget and try to analyse how it affects them.

According to her, investors also sit down and analyse the budget and that is why the capital market is looking at the impact of the budget and how the market can aid its implementation.

“The capital market is very important in funding a lot of projects in the economy. The capital market is important in raising these money to fund the budget. We want to be in the driver seat and contribute to the budget if the Federal Government,” Uduk said.

She added that capital market stakeholders are interested in driving and contributing to the economy as there are a lot of opportunities for the capital market in the 2019 budget.

In his Lead presentation, Head Economic Research, Securities and Exchange Commission ( SEC), Dr. Afolabi Olowookere said that opportunities exist for equities and sub- national issuances and urged state governments to explore the capital market for funding of their project.

Olowookere said that opportunities exist for equities and sub- national issuances as a means to fund the budget while urging a lower domestic borrowing by the federal government to make room for private issuances.

He listed some of the ways the budget can be funded to include creation of money market-based instruments and trading, commodity trading and derivatives, investing in eligible companies under tax credit scheme as well as attracting restructured oil assets to list.

Discussants on the panel opined that infrastructure development is of optimal importance for the achievement of development of sustainable prosperity adding that all sectors are dependent on infrastructure to attract investment and ensure the active participation of the private sector.

Experts noted that in the areas of infrastructure, housing sector, and issuance of mortgages, the capital market may participate through securitization.

They said there were great potential for pension fund administrators to invest in the real estate sector.

The seminar suggested that increase in allocation to the health and education sectors is necessary for development. This is because, people, and not just infrastructure, build and develop a nation.

According to them, the nation requires that the government should come up with policies that improve access to capital for small and medium scale enterprises (SMEs). SMEs currently employ a large proportion of the Nigerian workforce, thus they should be empowered through access to capital.

They urged governments to look towards the capital market as commercially viable infrastructure projects exist adding that enabling legal framework should be developed to enable the private sector participate.

The seminar also urged the government to enforce executive order No.2, which aims to promote local content in public procurement as this would be beneficial for listed companies.

The moderator at the event was Mr. Mobolaji Balogun of Chapel Hill Denham while Panelists include Hajara Adeola of Lotus Capital Limited, Toyin Sanni of Emerging Africa Capital Group, Prof. Olu Ajakaiye of Africa Centre for Shared Capacity Development Building, Prof. Uche Uwaleke of Nasarawa State University and Johnson Chukwu of Cowry Assets Management Limited.

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