Capital Market: SEC Advocates Reinforcement, Efficiency For Economic Growth

-by our correspondent.

The Securities and Exchange Commission (SEC) has underscored the need for strengthening the Nigerian capital market to accelerate domestic production and employment generation.

The Director General of the SEC, Lamido Yuguda, who made the call In Abuja at the Annual workshop of the Chartered Institute of Stockbrokers with the theme “Leveraging the Financial markets to achieve double digit economic growth for Nigeria”, said there is the need to leverage the capital market for intermediation by facilitating access to capital.

In his words; “This can be done by making it easy for corporate organisations to access long-term finance in an efficient manner, the capital market enhances the production levels of companies, thereby improving the capacity of such companies to expand their operations and employ additional labour.”

The SEC boss said it isn’t that difficult to achieve double digit growth in Nigeria given that most key factors of production – like a large vibrant youthful population, arable land, abundant rainfall, good drainage, and a large and growing pool of savings are available.

“Infrastructure is the area where we have a major problem, and here I mean roads and rail transportation, power generation and distribution, health infrastructure, and the like. I believe the capital can play a vital role in the financing of infrastructure and forums such as this one would do well to dwell on this important subject.

“Recall that at independence in 1960 the domestic savings pool was rather limited, yet the new nation was able to mobilise adequate funds from both domestic and foreign sources to fund the construction of highways, railways and large power projects. These same projects are in a dismal state today when the population has grown more than threefold. The Commission is increasingly focusing its attention on this subject because of its impact on economic development and the quality of life of our citizens”. Yuguda noted.

The SEC DG said the Securities and Exchange Commission, as the apex body responsible for regulating and developing the Nigerian capital market undertakes specific activities to ensure investor protection, preserve the integrity of the market and improve its overall efficiency through registration, surveillance and enforcement activities.

The Commission he stated, also supports market development through investor education and the introduction of robust frameworks for new products and processes in collaboration with market stakeholders adding “the activities of the Commission are necessary to ensure a well -regulated, effective, deep and liquid capital market which is crucial for promoting optimal capital allocation and intermediation to finance productive investment and generate much needed employment in the Nigerian economy”.

In his remarks,the President/Chairman of Council of CIS, Olatunde Amolegbe, said Nigeria is blessed with immense human and natural resources, but expressed dismay that the country is listed among the poorest countries in the world in term of per capita income.

“Just recently, in 2020, the country fell into its second economic recession in 5 years, although largely attributed to the Covid-19 pandemic which affected all countries in the world. We exited the recession in the fourth quarter of the same year 2020

“However, the critical point we have to note is that, historically, it has been observed that poorer countries need a much faster rate of GDP growth than the advanced economies of the world in to maintain standards of living as well as keep up with higher population growth rate.”  Amolegbe said.

He observed that despite government’s best efforts, the local financial market cannot be said to have been utilized optimally as at yet adding that the trend must be reviewed and reversed.

“It is obvious that an accelerated development of infrastructure will bring about job creation and employment opportunities with multiplier effects on the nation’s GDP. China’s GDP grows at an average of 10% per year. This has lifted over 800 million people out of poverty in recent years” He stated.

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