The Head Research FMDQ Group Plc, Dr.Vincent Nwani, has made a compelling call for stakeholders to put in more efforts to attract some of the $30trillion sustainability fund available globally into the Nigerian capital market.
Nwani made the call during the Capital Market Correspondents Association of Nigeria 2023 workshop in Lagos with the theme: ‘Leveraging Capital Market in Financing the National Development Plan.
Nwani acknowledged efforts made at the exchanges’ administrative level but insisted that more needed to be done by other participants in the market.
In his words, “On sustainability finance, about $30 trillion is out there looking for who to take it as far as sustainability is concerned.
“How is the Nigerian capital market positioning itself to be a strong recipient of this free fund? From the level of the exchanges: NGX and FMDQ, we are ready to list and are already listing.”
He noted that besides the Federal Government, Corporations and State Governments are now showing interest in green bonds. “Even the pink bond for women-owned/ managed businesses, we are seeing a lot of interest,” he said.
in terms of green bond offering, Nwani said Lagos State has gone far adding that announcements to that effect would be made soon.
“Lagos State has even gone very far and an announcement will be made on their coming to the market as far as the green bond is concerned. Rest assured things are being done around tapping the $30tn sustainability finance.
“The work there now is about training, enlightenment, and awareness for investors and issuers. Work is already being done on that.
“Over the last year, FMDQ has worked with FSD Africa to organise four or five different training sessions for investors, even the government, like key ministries and their functionaries in Abuja. Work is going on but like I said, we need to do more in this space,” he said.
Speaking on the theme of the workshop, Nwani argued that the Nigerian capital market may not be able to finance the National Development Plan, saying,
“If the capital market is going to power the National Development Plan, it is obvious that we have to increase scale. Is our capital market in a place where it can power this plan?
“A lot of work needs to be done. We are not there yet. The capital market is not positioned to power this plan yet. We need to make this market to be globally competitive. Is it currently globally competitive? The answer is no.
“Access to this market is restricted, the challenge with foreign exchange clearly shows that access is restricted. Is it liquid? Is it operationally efficient? In terms of cost, our market is one of the costliest in the world.
“Speaking of diversity, is it diversified in terms of products, in terms of securities?” Nwani queried adding that the government and stakeholders needed to pay more attention to housing and bridging the housing deficit.
“In financing this National Development Plan, for infrastructure, we have emphasised but we also need to look at housing. About 17 million housing units are needed.
“Being able to solve that puzzle of delivering housing to the poorest of the poor, through mass housing. Any day we solve that, we will be closing the gap in the National Development Plan,” he stated.
Nwani challenged players in the capital market to move away from bite-sized investments and make bold moves.
“We need to be bold in this market. This sachet-sized investment initiatives need to move to something big for us to be able to finance the National Development Plan,” he said.
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