24th CIS Summit: Stakeholders Call on Capital Market to Support Nigeria's Economic Growth

Thursday, November 05, 2020 / 3:17 PM / Nifemi Taiyese for Proshare WebTV / Header Image Credit: WebTV

Nigeria's sustainable economic growth and stability can be achieved by leveraging the capital market. This was part of the key takeaways from the 24^th summit of the Chartered Institute of Stockbrokers (CIS) which discussed the theme "Navigating Through The Storms: Re-energizing the Economy Through The Capital Market".

Mr. Olatunde Mohammed Amolegbe, FCS, President, and Chairman of the Governing Board of CIS Nigeria in his welcome address said the conference was the family gathering of stockbrokers from all walks of life. He acknowledged that the 2020 meeting was the first virtual conference of the Institute.

"This year has been one of the most demanding in recent memory because of the COVID-19 pandemic and social upheavals witnessed in Nigeria recently. The two issues combined have set the Nigerian economy back by several billions of naira with the attendant problem of providing sustainable livelihood for millions of citizens".

He further stated that finding a solution to the issue of raising capital to fund growth was a key objective of the conference.

Professor Olalekan Oyenusa representing the Executive Governor of Osun state, Mr. Adegboyega Oyetola, delivered the opening address, noting that because of the coronavirus pandemic, the Nigerian economy was currently largely depressed and urgently needed fresh ideas.

Oyenusa noted that the conference theme aptly captured the desire to provoke and contribute to solutions to raise the Nigerian economy from the backwaters of depression.

He brought to the fore the recent youth-led protest, which showed what could happen if nothing was done to create enduring and inclusive policies.

He identified stockbrokers as professionals at the vanguard of wealth creation. He noted the importance of investors in accelerating economic growth and observed the critical need for stockbrokers to come up with bright ideas towards pathways to development for Nigeria.

Hon. Babangida Ibrahim, ACS, Chairman House Committee on Capital Markets described the conference and its theme as timely, unique, and important at the present state of the nation's economy and with the after effects of a first wave of COVID-19.

"Our national dilemma demands collaborative efforts from all fronts and perspectives to weather the storm and generate sustainable economic outcomes for Nigeria," the lawmaker said.

He commended the Institute for the foresight to meaningfully chart a pathway that would help solve the problems facing the economy.

The House member noted that the conference speaks to the character and serious-mindedness of the leadership and members of the CIS. Hon. Ibrahim expressed confidence that the conference would add value to the national discourse on economic growth and development.

The Chairman, Senate Committee on Capital Markets, Senator Ibikunle Amosun, FCA, in his special remarks said the conference was coming at a time when the government and private sector, were independently and collaboratively exploring ways to strengthen the capital market and diversify the economy.

He noted that it was pertinent to recognize the capital market as a major segment of the Nigerian economy, that could provide solutions to the problems that the country is presently experiencing. He observed that the capital market could help in the areas of wealth creation, development financing, job creation and growth of national domestic product (GDP)s.

Amosun said it was important that stakeholders work together to ensure that the values inherent in the capital market was explored to achieve the national objective of sustainable and equitable economic growth and development.

The Senator assured stakeholders that the Senate Committee on Capital Markets was ready to collaborate with the CIS and other key parties, at addressing the several challenges inhibiting the smooth operations of the Institute and other professional bodies within the sector.

He also mentioned that the committee will ensure prompt passage of relevant bills that will standardize the training and certification for all professionals operating in the capital market.

Furthermore, the Senate Committee On Capital Market is ready to provide legislation that will address the issue of multiple taxation and unclaimed dividends, which are fast becoming threats hindering the growth of the capital market.

Representing the Director-General of the Securities and Exchange Commission (SEC), Mr. Dayo Obisan, Executive Commissioner Operations, SEC Nigeria said the conversation could not have come at a better time as the economy has weathered some serious storms in recent times, ranging from weak global growth, a decline in crude oil prices, foreign exchange issues, government revenue challenges, high inflation, high unemployment rate, rising poverty levels, food/security challenges, slow GDP growth and recently the COVID-19.

He observed that it was critical to strategize and proffer workable solutions for economic recovery which makes the conference theme apt and timely.

Speaking on areas where the capital market could be leveraged to navigate the storms and reenergize the economy, Obisan addressed the following;

• The need for Nigeria to industrialize and move towards the path of sustainable development.
• The need to adequately address the infrastructure gap in which the capital market is strategically positioned to play a major role in financing infrastructure development in Nigeria.
• Furthermore, government at various levels have been running on large budget deficits in recent times due to the need to finance critical infrastructure, it is believed that if some of the products in the capital market such as revenue bonds and other securitization instruments are adequately leveraged, the government may be able to free some of its resources for other social services.

"Capital is critical to the growth of businesses and the capital market provides opportunities to issuers to access long-term capital to fund operations and expansion projects," Obisan said.

He said the SEC would ensure that the regulatory framework and policy environment remains supportive as all relevant stakeholders strive towards ensuring that the capital market is positioned to facilitate the recovery of the economy.

President of the Nigerian Stock Exchange (NSE) Otunba Abimbola Ogunbanjo in his remarks highlighted the fact that the COVID-19 outbreak created a financing gap that threatened to destabilize the government's fiscal position.

According to the NSE's President, the Nigerian capital market was not spared, foreign portfolios investors who account for an average of 50% of transaction flows immediately identified imminent risk of declining foreign reserves and began pulling out of the stock market in droves.

"These portfolio investors recounting their experience in 2016 immediately took a flight to safety for fear of a pronouncement on capital controls by the monetary authorities. However, the resilience of the capital market against the COVID-19 has been commended globally as the market recorded gains of 8.1% and 9.8% respectively in April and May 2020," the NSE President said.

The recovery has been mainly fueled by domestic investors who now account for about 62% of total market transactions as of September 2020.

He admitted that with the emergence of a broader domestic investor base, there was new opportunity for users as well as providers of capital to collectively catalyze the recovery of the  economy with the capital market serving as an intermediary.

The event featured two separate panel sessions.Mr. Asue Ighodalo Co-Founder Banwo and Ighodalo gave the pre-panel keynote speech for the first plenary session themed: “Rebirth of CAMA: Implications for the Capital Market Ecosystem” with the CEO of Frontier Africa Reports Mr. Boason Omafaye moderating the session. It featured the following discussants; Dr. Jumoke Oduwole Senior Special Adviser to the President on the Ease of Doing Business, Professor Usman Muhammad Shua'ib,  Dean Faculty of Law, Bayero University Kano, and Associate Professor Franklin Ngwu of the Lagos Business School.

The second plenary session 2 themed "Alternative Investments: How to Invest When Traditional Options Taper", was moderated by Tunji Andrews Founder Awabah Nigeria. The pre-panel keynote speech on "Alternative Investments in a Tapering Economy" was presented by the MD/CEO NASD, Mr. Bola Ajomale.

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