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Notwithstanding the federal government drive to jump start the domestic economy, there is need for a holistic revitalizing of the entire structure of governance for growth and development to be achieved, GMD/CEO Nigerian Exchange Group (NGX), Mr. Oscar Onyema has said.
He said the investing public believes the President, Bola Ahmed Tinubu has started off on a right footing by the removal of fuel subsidy and the unification of the Naira exchange rate which offers investors favourable opportunities for possible investment.
Oscar Onyema who made this remarks in his keynote address at the City Businessnews Summit/Awards, with the theme Repositioning Nigerian Economy: 2023 & Beyond on Wednesday, was represented by the Group Chief Investment Officer Tony Idugboe.
According to Oscar Onyema who spoke on the position of Nigeria today, and the tweaks we can make to get a well-functioning capital market noted that, despite the initial hippcups occasioned by the subsidy removal, it would create opportunities for the Government to redirect funds to other priority areas that require national development.
He said investors also believe that, the unification of the Naira exchange rate by the Federal Government aside offering investors favorable opportunities for possible investments, it will also close unnecessary leakages in the system.
He however contend that, revitalizing the economy would require a critical review of our security architecture, optimization of the energy sector, monetary and fiscal policy coordination, and policies rooted on market fundamentals.
“We note that the government is already moving in this direction, so quality execution will be key.
“From the Nigerian Market Update for August 2023 by PWC, one of the macro-economic activities of the Federal Government to improve its fiscal position and increase revenue is setting up of Presidential Committee on Fiscal Policy and Tax Reforms to improve revenue collection efficiency, ensure transparent reporting, and promote the effective utilisation of tax, alongside the planned sale of about 20 state-run companies to raise funds and improve governance in these entities.
“These opportunities would enhance the growth of the capital market and further improve the overall state of the economy.
“Revitalizing Nigerian economy is imperative for the naton’s development. A well-developed domestic capital market will enable governments and companies to access long-term finance in local or foreign currency, increases investments directed toward innovation, and promotes sustainable growth with greater employment opportunities for a growing middle class. In the coming years, capital markets will play an even bigger role by facilitating the mobilization of more private capital into key sectors such as energy, infrastructure, housing, Small and Medium Enterprises (SMEs), and sustainable finance”, he added.
Speaking on the role of capital market in the domestic economy, Onyema said, as key driver of economic growth, it supports the overall economic objective of sustainable development.
“It facilitates the flow of household and business savings to finance investments in the real economy.
“It also provides individuals and organizations with new investment opportunities, creates wealth, and serves as an avenue for the government to fund critical national development programmes.
“One of the most challenging barriers inhibiting businesses from reaching their “innovation potentia” is access to finance. The capital market plays an important role in supporting innovation and creativity via market-based finance.
“It provides platforms for businesses to access funding for innovation projects with a risk profile that may not fit into the typical models for granting bank loans.
“With a wide range of funding instruments, Innovators, creators, and investors benefit from more financing alternatives including Equity, Debt, and Private market. Funding sourced from capital markets, either exclusively or as a complement to bank-based financing, helps companies and entrepreneurs grow quickly and take on innovation projects and/or expand geographically with more flexible and efficient funding models.
“Nigerian Exchange Group (NGX Group) Plc through its subsidiaries, focuses on driving both national and sub-national growth through the provision of innovative capital market solutions for financing needs. On Nigerian Exchange (NGX) Limited, the operating Exchange subsidiary,we have raised over four trillion, seven hundred billion (4.7 trillion) in FGN bonds for the national and over one hundred and thirty-seven billion(137 billion) for the sub nations in 2023.There are still opportunities for local governments to raise project specific financing.
