Vice President YemiOsinbajo has said that there is need to make medium to long term capital in the form of bonds, equity and loans available for investors.
Prof. Osinbajo stated this at the 2nd Capital Market Stakeholders Forum held by the National Assembly with the theme: Capital Market as a Catalyst for Growth and Development” yesterday in Abuja.
According to the Vice President, this would not only improve business environment, it would also help investors take advantage of government’s incentives.
The necessity for stable long term funds for the actualisation of the vision of economic growth and development he said, places the capital market in a unique and strategic position for which it must be prepared.
Represented by Director General, Debt Management Office (DMO), Ms. Patience Oniha, Osinbajo insisted that the number of strategies and policies introduced by the present administration contributed to Nigeria’s early exit from recession even as he added that the government remains committed to their continued implementation in order to achieve economic development.
Osinbajo therefore expressed the urgent need for the nation to sustain its present growth and also ensure that the growth translates to development with positive impact on the lives of Nigerians.
In a keynote address, Acting Director General, Security and Exchange Commission (SEC), Ms. Mary Uduk observed that while economic growth is increase in the production of goods and services usually measured in GDP, economic development is larger as it includes improvement in the quality of life and living standards of citizens.
These includes improvement in literacy, health and life expectancy, better savings- investments culture as well as improves wealth distribution, housing and environment.
She disclosed that there are many capital market instruments that can be used to stimulate economic development in Nigeria- bonds, equities and commodities.
“Recently, Nigeria issued the N100 billion sukkuk to finance 25 road projects and also Green bonds to finance afforestation, renewable energy and provision of clean energy.
“Opportunities also exist to issue revenue bonds to finance revenue generating projects which will exert less pressure on government budget and allocation.
“The Nigerian bond market therefore, has the potential to close the country’s huge infrastructure deficit, estimated at $350 billion in 2013.
“Equities also have been issued by many public companies to raise funds and expand their operations. This has engendered improved productivity, employment and governance.
“Government has also utilized the platform of the capital market to privatize some of its enterprises in order to make them profitable, less bureaucratic and less dependent on lean government resources.”
Uduak said so far, federal government has issued N8.5 billion savings bonds adding that other investible opportunity in the capital market is Collective Investment Schemes currently totaling N610 billion.
She also explained that portfolio investment in the first quarter of 2018 amounted to 16.5 percent of total $6.3 billion capital importation.
However, there is still need to encourage more retail investor participation so that market can be less vulnerable to the behavior of foreign investors. Financial literacy, e-dividend, direct cash settlement and investors protection funds are to raise the retail investors’ confidence and participation levels.
