SEC, Ministry To Partner On Raising Capital For Non-oil Sector

The Securities and Exchange Commission (SEC) and the Capital Market community are to partner with the Federal Ministry of Mines and Steel Development and other stakeholders to promote the use of alternative means of raising capital such as non-interest products, tokenisation of assets as well as adopting technologies such as FinTech.

This, among others, was contained in a communique issued at the end of a two-day workshop on financing the Nigerian solid minerals sector through the capital market and the critical role of the commodities exchanges.

The workshop also emphasised the need for the FMMSD and Federal Ministry of Education to re-prioritize the focus on STEM education at basic, secondary and tertiary institutions.

According to the communique, there is a need for the Capital Market Community to ensure that the market infrastructure that supports the bringing to market of mining ventures is in place, while also protecting investors.

“All stakeholders should be involved in promoting sustainable practices and ESG standards within the mining industry while the FMMSD is to ensure the availability of geoscience data, given that it is essential alongside relevant market data in enabling intermediaries and commodities exchanges to structure products for the mining industry,” he stated.

The participants agreed that, the FMMSD should collaborate with SEC and other stakeholders to develop capacity in the industry and address the issue of interference in mining activities by the State Government, which is identified as a major challenge faced by mining companies, the FMMSD is to take concrete steps to resolve the conflict in State and Federal laws as well as overlapping oversight.

The executive commissioner, Operations of the SEC, Mr. Dayo Obisan said, the solid minerals sector possesses immense transformative potential for sustainable economic growth in Nigeria and holds immense potential to contribute significantly to national economic diversification and sustainable development goals.

“With over 44 minerals discovered across the Federation, the mining industry can play a vital role in diversifying our economy away from crude oil dependency.”

He added that, however, despite the sector’s vast potential, the mining industry in Nigeria has faced significant challenges, with one of the most critical being inadequate access to capital, saying, the traditional sources of capital, such as bank loans are a total mismatch in terms of capital structuring for the project types in the mining sector.

To address the financing challenges faced by the mining industry, the SEC Commissioner said stakeholders must recognize the crucial role of the capital market in providing much-needed funding for large-scale mining projects as the capital market offers a wide array of financial instruments and products, attracting long-term investments and diversified sources of funding.

He said by tapping into this market, mining companies can strengthen their financial position and promote transparency, accountability, and good corporate governance practices to attract both domestic and foreign investors, stimulating investment inflows and fostering growth in the sector.