The Nigerian Government has been urged to encourage companies, particularly those which the government has direct holding and partnerships with to list on the Nigerian exchange.
This was part of the recommendations of the Managing Director/Chief Executive of Arthur Steven Asset Management Limited, Mr Olatunde Amolegbe, at the Capital Market Correspondents Association of Nigeria (CAMCAN) January forum in Lagos themed “Review of 2023 Market Performance and Outlook for 2024.”
Amolegbe said if the government would encourage the companies to list on the nation’s bourse, it would not only deepen the capital market but also engender transparency, significantly boost capital market participation and tax revenue generation.
“A lot of businesses are not listed on the exchange and they do business a lot with government; the more transparent the listing, the more tax revenue,” he said.
He said while developed countries are having over 50% market capitalisation to Gross Domestic Product (GDP) ratio, Nigeria’s market capitalisation to GDP stands at 13 percent.
“This is an indication that majority of the big companies in the country are not participating in the Nigerian capital market,” he said.
Amolegbe, who is also a former President of the Chartered Institute of Stockbrokers, expressed optimism on the listing of Dangote Refinery and NNPC Limited, stating that their listing would boost the capitalisation of the Nigerian capital market.
Amolegbe listed the events that underpinned the market performance in 2023 as smooth transition of government, president’s inaugural speech, enactment of partial removal of subsidy, unification of foreign exchange and increasing monetary policy rate.
Going forward, he charged the government on the rising spate of insecurity in the country saying until it is addressed, inflation would continue to soar and investors would remain wary of investing in the country.
Amolegbe stated “Insecurity is a major issue and government needs to work on it as it is disrupting supply chain and this is contributing to the increase in inflation rate.
“Farmers are not unable to produce and the ones that can produce can’t get to market. As long as the environment is seen as unstable, investors, both local and foreign will continue to be wary of investing, leading to a further decline in foreign exchange inflow”.
According to him, measures must be put in place to ensure foreign exchange stability as foreign exchange would be a significant contributor to where the capital market would be by the end of 2024.
Hauwa Abu
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