President Bola Tinubu’s ambition for Nigeria to achieve a $1 trillion economy by 2030 faces significant challenges, including the need for robust growth and effective capital market strategies.
Stockbrokers at the Chartered Institute of Stockbrokers’ annual conference proposed listing the Nigerian National Petroleum Company Limited (NNPC) and other underperforming state enterprises on the capital market to enhance profitability and attract investment.
The stockbrokers have identified strategies by which the federal government can deepen the Capital Market to achieve its proposed $1trillion economy without increasing borrowing or deploying ways and means to finance the economy.
The Institute in a 13-point agenda, urged the federal government to list NNPC and other moribund state enterprises on the secondary markets to deepen the markets, enhance the companies’ ability to make profit and generate revenue for the government through tax.
They noted this in a communique signed by the 13th president and chairman of council, Chartered Institute of Stockbrokers (CIS), Oluropo Dada and the registrar and chief executive, Josiah Akerewusi.
Stockbrokers had last month converged in Ibadan, Oyo State for their 28th Annual Conference Themed “Capital Market as Catalyst for the $1trillion Economy”, which brought together top decision makers and leading CEOs in various sectors of the economy.
Participants canvassed the need to rebase the Nigerian GDP to reclaim the country’s status as Africa’s largest economy to create opportunities to achieve the $1trillion target. They noted that the informal economy constituted a significant portion of Nigeria’s GDP but remains largely untapped by the capital market.
“Policies should entail incentivising indigenous and privatized companies, as well as SMEs, to list on the Nigerian capital market. This can be achieved through tax holidays and patronage of products and services of quoted companies. Government should conclude the ongoing review of the Investment and Securities Act (ISA) while the capital market regulators should review relevant rules and laws in line with the global best practices to boost investor confidence, create a favourable business environment for listed companies and remove restrictions hindering liquidity access for stockbrokers.
“The Nigerian capital market should be integrated into Fintech solutions, blockchain technology, and other digital innovations to enhance accessibility, efficiency, transparency and attraction of Millennials, Gen Z, Gen Alpha etc while market operators should develop products that attract investment appetite of the technological savvy youths. Government should address foreign exchange challenges and other inhibitions to participation of foreign investors in Nigeria. This will also enhance Foreign Direct Investment (FDI).
“There is a huge knowledge gap among investors, hence, financial literacy programmes should be pursued with renewed vigour to expose existing and potential investors to the concept of trade-off of risk and reward in investment decision-making. Financial Literacy should cut across all segments of investors and this requires collaboration of market regulators with all stakeholders.
”The Nigerian capital market should reflect the key sectors like agriculture, oil, and gas to better align with GDP composition and provide opportunities for capital formation and mobilisation. Governments at all tiers in Nigeria should leverage more on the capital market to raise long-term funds for infrastructural development by issuing project tied bonds with irrevocable standing payment order (ISPO) which removes the risk of default.
“In order to relieve itself of perennial debt overhang, Nigeria should opt for debt restructuring and extension of maturity period to enable it to manage its resources for the overall development of the economy. On the monetary side, the Central Bank of Nigeria (CBN) should intensify tight monetary policy to control inflation which has been attributed to the current regime of stagflation.
“Government should exploit opportunities in the Commodities Ecosystem to Grow the GDP: Commodities Ecosystem remains a niche market in Nigeria. Government should implement the policies enunciated to strengthen commodity trading and Commodity Exchanges to enhance export trades, generate forex, boost external reserve and strengthen the Naira.
“Government should implement structural reforms, including deregulation, debt management, and public awareness campaigns by collaborating with the market stakeholders to unlock Nigeria’s economic potential. It should put in place, policies to attract Private Equity, Venture Capitalists and Angel Investors: Government at all tiers should leverage tariff policies to support local industries, similar to strategies employed by China and the USA to pave the way for participation of private equity, venture capitalists and Angel investors to support the growth of SMEs in Nigeria”, according to the communique.
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