Liquid Govt Bonds Will Boost Economy – SEC

The Securities and Exchange Commission (SEC) has said the development of a liquid government bonds market would have a positive effect on the economy.

Director-general of SEC, Mr. Lamido Yuguda stated this during the annual conference of the Capital Market Correspondents Association of Nigeria (CAMCAN) held at the weekend in Lagos.

According to Yuguda, this is because a liquid government bond markets implies that there is sufficient offering of government bonds across a range of maturities, which is in turn key to the construction of the benchmark yield curve (which is important for the establishment of the market-based risk-free interest rate used in equity pricing).

Represented by the executive commissioner, operations of SEC, Mr. Dayo Obisan, Yuguda said this synergistic relationship between the government bond and equity markets have been observed in several East Asian economies, which experienced a surge in private investment and equity market capitalization following the establishment of a liquid debt securities market.

Yuguda stated that, as the apex regulator of the capital market, the SEC is committed to creating an enabling and facilitative oversight and regulatory framework supportive of the deepening and development of the Nigerian capital market.

He said: “As you are aware, the Minister of Finance, Budget and National Planning, Mrs. (Dr.) Zainab Shamsuna Ahmed, launched and unveiled the revised Nigerian Capital Market Master Plan 2021-2025, saying “the updated Master Plan underscores the Commission’s commitment to deepening and re-positioning the financial market as a key anchor of our economy.’’

“The Master Plan, which represents collective aspirations of the capital market community, is focused on driving initiatives geared towards growing and deepening the Market with the ultimate goal of accelerating the emergence of our Country into the top 20 global economies by the year 2025.”

He disclosed that the capital market is more resilient and is on a steady growth trajectory, adding that capital market correspondents have contributed to the development of the market and expressed delight at their partnership with the Commission in this noble task of developing and deepening the capital market.

He assured that the SEC is committed to supporting efforts aimed at addressing financial literacy and empowerment gaps within our society, saying, this commitment is expressed in the various financial inclusion and literacy initiatives being undertaken by the Commission solely or in collaboration with other stakeholders.