The government has been urged to make the capital market the fulcrum of its industrialisation agenda and economic development in a bid to urgently lead the country out of poverty.
This was part of the resolutions at 3rd annual budget seminar of the SEC with the theme “Budgets, Elections and Capital Markets: Risks and Opportunities in 2019”.
In her remarks, Mary Uduk, acting director general of the Securities and Exchange Commission, (SEC), said government budget affects the economy and the economy in turn affects the capital Market.
According to her, stakeholders both local and foreign are interested in the budget and try to analyse how it affects them. 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.
She said, “the capital market is very important in funding for a lot of projects in the economy. The capital market is important in raising these monies to fund the budget. We want to be in the driver seat and contribute to the budget.
“We are interested in driving and contributing to this economy and that is why we are having this seminar. We believe there are a lot of opportunities for the capital market in this budget. There is need for us to seat down again as a capital market community and find ways of driving the budget.”
In his lead presentation, Dr. Afolabi Olowookere, head economic research, SEC, 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 FGN domestic borrowing to make room for private issuances.
He said some of the ways the budget can be funded 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.
“Concerning infrastructure, the housing sector, and issuance of mortgages, the Capital market may participate through the securitization. There is great potential for Pension Fund Administrators to invest in the real estate sector” they stated.
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. We must equally invest in the people.
“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.
“The capital market should be looked into, as commercially viable infrastructure projects exist and 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. This would be beneficial for listed companies.
The moderator at the event was 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.
The Budget Seminar Series is a forum for evaluating the connection between the Nigerian capital market and the annual Federal Government budget. Its major aim is to identify how the capital market can contribute, and in turn, benefit from the budget and its implementation.