Stockbrokers Suggest Strategies for $1 Trillion Economy

In a statement signed by Dr Josiah Akerewusi, the Registrar/Chief Executive of the Chartered Institute of Stockbrokers (CIS), and Mr Oluropo Dada, President/Chairman of the Council of CIS, Nigerian stockbrokers have suggested ways for the Federal Government to expand the capital market to realise its targeted one trillion dollar economy.

The communique was from the 28th Annual Conference of CIS held in Ibadan with the theme: “Capital Market as Catalyst for The One Trillion Dollar Economy’’.

Dada stated that if followed, the suggested tactics would enable the government to accomplish its objective without taking on more debt.

He called on the Federal Government to list Nigerian National Petroleum Company Ltd. And moribund state enterprises on secondary markets to expand the markets, improve the companies’ capacity to turn a profit and create opportunities for the country to regain its position as Africa’s largest economy and reach the one trillion dollar target.

Additionally, the CIS president stated that policies that would incentivise indigenous and privatised businesses as well as Small and Medium Enterprises (SMEs) to list on the Nigerian capital market would be necessary to achieve the goal.

He said that the informal economy constituted a significant portion of Nigeria’s GDP but remained largely untapped by the capital market.

“Government should conclude the ongoing review of Investment and Securities Act while capital market regulators should review relevant rules and laws in line with global best practices,’’ he said.

As stated by him, this will increase investor trust, provide a beneficial business environment for listed businesses, and remove constraints hampering liquidity access for stockbrokers.

“The Nigerian capital market should be integrated into Fintech solutions, blockchain technology, and other digital innovations to enhance accessibility, efficiency, transparency, and attraction of Millennials, Gen Z, and Gen Alpha, among others.

“Market operators should also develop products that attract the investment appetite of the technology-savvy youths,” he said.

According to him, the government should resolve foreign exchange difficulties and other inhibitions to the participation of foreign investors in Nigeria.

“This will also enhance Foreign Direct Investment,’’ he added.

Dada said there was a large knowledge gap among investors, recommending that financial literacy courses should be undertaken with renewed enthusiasm.

He emphasised that financial literacy should be cut across all categories of investors and would demand the participation of market regulators with all stakeholders.

He said, “The Nigerian capital market should reflect the key sectors such as agriculture, oil, and gas to better align with GDP composition and provide opportunities for capital formation and mobilisation.

“Government at all tiers in Nigeria should leverage more on the capital market to raise long-term funds for infrastructure development.’’ 

Dada said that this should be done by issuing project-tied bonds with irrevocable standing payment orders, which would remove the risk of default.

“To relieve itself of perennial debt overhang, Nigeria should opt for debt restructuring and extension of maturity period to enable it to manage its resources for the overall development of the economy.

“On the monetary side, the Central Bank of Nigeria should intensify tight monetary policy to control inflation.

“Government should exploit opportunities in the commodities ecosystem to grow the GDP. Commodities Ecosystem remains a niche market in Nigeria.

“Government should implement the policies enunciated to strengthen commodity trading and commodity exchanges to enhance export trades, generate forex, boost external reserve and strengthen the Naira,’’ he said.

To unleash Nigeria’s economic potential, he suggests that the government work with market stakeholders to implement structural reforms, such as debt management, deregulation, and public awareness campaigns.

In addition to saying that all levels of government should use tariff policies to boost regional businesses, Dada noted that the government should implement measures to draw in private equity, venture capital, and angel investors.

According to him, this would open the door for angel, venture, and private equity investors to support the expansion of SMEs.

Manomsi Mallum/NAN