SEC harps on resilient capital market for economic growth

THE Securities and Exchange Commission has expressed the need for the capital market to be strengthened to accelerate domestic production and employment given the direct correlation between the increase in production and job creation.

To achieve this, Director General of the SEC, Mr Lamido Yuguda said there is the need to leverage the capital market for intermediation by facilitating access to capital.

This, he said, could be done by making it easy for corporates 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.

Lamido spoke 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’ held in Abuja.

The SEC boss posited that it should truly not be 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.

He said “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”.

The SEC DG said by serving these functions, the financial sector often facilitates domestic production and employment, especially when capital flows efficiently into the production process, leading to employment generation, increase in household disposable income, improved purchasing power and ultimately resulting in higher economic growth.

Yuguda disclosed that 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, Mr Olatunde Amolegbe, President/Chairman of Council of CIS 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 terms of per capita income.

Amolegbe said the theme for this year’s workshop has become imperative to drive the Nigerian economy as driving the economy will require financing of the right form, type, and mix.

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

“Besides, governments’ participation in the market is a win-win affair for the government, the market, and investors. The time has come for all tiers of government to stage a comeback to the financial market to enhance capital raise for infrastructure development. Our seasoned facilitators shall surely do justice to this time-tested theme today.

“It is obvious that 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 cent per year. This has lifted over 800 million people out of poverty in recent years,” he stated.

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