Access Bank

Capital Market Stakeholders Tasked On Economic Development At SEC’s 2019 Budget Seminar

…Equities Market To Rebound

The growth and development of the economy lays within the ability of stakeholders in the capital market to come up with frameworks that will assist the government in formulating policies that will aid growth and development of the domestic economy.

Also, the capital market has been adjudged as the veritable grounds where cheap funds can be sourced to correct the monumental infrastructural deficit which is the fulcrum for development in every designing economy that wants to make progress.

This formed the major highlights from a six-man panel of discussant at the Tuesday’s SEC 2019 Budget Seminar themed Budget, Elections and Capital Markets: Risks and Opportunities in 2019.

According to the discussant, its high time stakeholders from the capital market stop expecting hand-outs from the government on how to grow the economy vis-à-vis the equities market, which is believed to be the bastion of the economy, rather operators in the market should be one giving direction to the government.

To this end the discussant suggested that framework on how best to securitise every sector of the economy to make every Nigeria be part owner, is one that will stimulate the needed growth and development the country has been yearning for.

“Stakeholders in the equities have a major duty to grow the economy. Turning government illiquid asset to liquid asset will be a huge leap. We should not wait for the government to do everything. It should be a two-way dealings. When government bring something on board, what should government get in return should be the new way we should be thinking’.

“Legal framework that we pave way for private entrepreneurs to invest in critical infrastructure in the domestic economy should be drawn out, as this is only way the needed job creation policy drive of government and other objectives can met. The poor showing of Gross Domestic Product posture which is still low for our population, the delay passage of the budget which has become a recurring yearly thing, the continued payment of huge subsidy on petroleum products are some of the pitfall of government that urgently needed to be addressed if the country must take its pride of price in the committee of nations.

On deepening the stock market, the panel argued that government as a necessity must encourage the usage of local produce which in the long will assist growth of companies listed on the equities market to compete favorably with their counterpart.

“ In the nearest future the stock market will rebound on the strength of foreign investors who knew that shares of listed companies in our local bourse are undervalued”, it added.

The panel of discussant includes; Mr. Mobolaji Balogun, CEO, Chapel Hill Denham; Mrs. Hajara Adeola, MD/CEO Lotus Capital Limited; Mr. Johnson Chukwu, CEO, Cowry Asset Management Limited; Prof. Olu Ajakaye from Africa Centre for Capacity Development; Mrs. Toyin Sanni, CEO, Emerging Africa Capital Group and Prof. Uche Uwaleke from Nasarawa State University.

The following points formed the Communique from panel of discussants
• Infrastructure development is of optimal importance for the achievement of development of sustainable prosperity. 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.
• It was 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
• There should be pressure on the government to evolve such Public-Private Partnership for infrastructure development.
• Theory on public expenditure dictates that it should be growing at a steady pace by either retaining the previous budget, or maintain its size. The current budget appears to violate this.
• Research indicates other countries include pro-capital measures in the budget. Pakistan is looking at reducing company income tax of listed companies, while India looks to privatise through the stock exchange. We must introduce pro capital market measures in the Federal government Budget.
• We should abide by the constitution for the budget to be implemented from January to December.
• Get the government to enforce executive order No.2, which aims to promote local content in public procurement. This would be beneficial for listed companies.
• There is a tendency for the market to accept signals from the Federal Government. However, the market should reengineer from receiving signals from government to giving the government signals.
• securitizing some government assets can turn illiquid assets to liquid asset.
• The government should recognise its constraint and partner more with the private sector for development.
• A considerable amount of taxes realized by FIRS are from listed Companies, thus the government should encourage more Companies to list and become public.
• State governments should be encouraged to raise capital for developmental projects from the Capital market and not the bank loans in order to avoid loan mismatch
• SEC needs to urgently lead the country out of poverty through the capital maket.

Details Later.

Check Also

EMT Foundation:Expanding Community Impact With Life-saving Skills

It was a moment of Joy, relief and excitement recently as the Esther Matthew Tonlagha Foundation held its Batch C Skills Acquisition Program graduation ceremony in Effurun, Delta State.

Social Media Auto Publish Powered By : XYZScripts.com