The African Development Bank (AfDB) Group’s commitment to financial institutions and infrastructural development in Nigeria now stands at $1.3 billion. The amount represents 30 per cent of AfDB’s portfolio.
The Bank’s Director-General, Nigeria Country department of AFDB, Kanin Barrow on made this known in Abuja during the signing of a $460,000 agreement with the Securities and Exchange Commission (SEC).
AfDB and SEC signed the agreement to support the acquisition and deployment of automated surveillance systems in the capital market to enhance SEC’s role in investor protection and ensure a transparent, fair and orderly market which reduces systemic risks.
The DG said the intervention included a $10 million financing package for Infrastructure Credit Guarantee Company Limited (infraCredit) which was geared toward supporting the development of the corporate bond market.
Barrow noted that the bulk of the interventions were in the form of lines of credit to financial institutions and the support for the market was particularly for infrastructure development and to mitigate currency risks.
He revealed that the Bank is also supporting Nigeria’s Infrastructure Debt Fund through a 10 million dollar facility that provides long-term local currency debt financing.
He said ”The objective is to crowd-in local pension funds and other institutional investors for infrastructure development in Nigeria.
”The pandemic has reinforced global risk aversion, prompting international investors to move their portfolios into safer assets and havens.
”It is our desire to see growth of the equity market well beyond the current N28.16 trillion.
“That is why the AfDB Group is supporting initiatives to integrate capital markets in Africa and innovative financial instruments.
“This has become even more urgent with the African Continental Free Trade Area (AfCFTA) being operational”.
Barrow stated that the surveillance system will enhance the SEC’s regulatory and supervisory oversight of securities trading in the country and would be implemented in two years at a cost of less than $1 million dollars with over $500,000 to be contributed by the SEC.
“The grant was from the Capital Markets Development Trust Fund (CMDTF), a multi-donor trust fund administered by the AfDB and supported by the Ministry of Finance of Luxembourg and Ministry of Foreign Trade and Cooperation of the Netherlands.
Lamido Yuguda, the Director-General of the SEC, said a market surveillance system was required to aid SEC in detecting and addressing market abuses as quickly and efficiently as possible to prevent infractions.
