The Securities and Exchange Commission (SEC) has restated the vital role the capital market plays in the development of any country through infrastructure funding.
Director-General of the SEC, Lamido Yuguda, stated this when a team from the Nigerian Economic Summit Group (NESG) visited the commission in Abuja, at the weekend.
The SEC DG said that the capital market can do more in the areas of provision of long-term funds to develop infrastructure for the country and support developmental projects.
He said: “our collective economic power is bigger than the government and in many countries, you find out that the capital market is funding the government.
“When you save, the fund is used to create economic value that enhances your standard of living and this is a win-win. You get financial returns and also get utility from the investments and this is achievable.”
Yuguda welcomed the collaboration with the NESG, stating that both organisations could do more to boost the economy.
“On the capital market, it is a welcome development that we are talking with the NESG for there is something that needs to happen in this country. When you look at our policy environment, in many areas it is not conducive for the return of capital to investors and we are working hard to tackle this,” he said.
The SEC boss noted that the telecommunications companies are successful because the services are not free of charge.
“We all pay for the services, no one is getting the services for free, but when we move on our roads, we say no we do not want to pay for it. In other countries, people pay for their roads and they are happy doing that because the roads are good.
“We need to have a collaboration with a group like NESG. Once we can put things right, investors will be willing to put in money and there will be returns. ”
In his remarks, Chief Executive Officer of NESG, Laoye Jaiyeola, expressed worry that the banking sector is being over-stressed, urging governments and corporate organisations to look towards the capital market for their funding needs.
Jaiyeola stated that transactions can be restructured in the form of bonds, treasury bills and other instruments that will fund these projects without going through the banks.
He pointed out that the market needs to take the bull by the horn in the areas of closing funding gaps to avoid incurring perpetual debt as a nation.
“That is one of the reasons we should re-engage, to see how we can get an Investments and Securities Act that will ensure that the needed long-term funding for development in Nigeria is given priority.
” The short-term funding cannot help us; we need to begin to move to the long-term. We are passionate about it and we need to raise this capital to fund the development needs of the country.”
Also speaking, Executive Commissioner Legal and Enforcement SEC, Reginald Karawusa stated that the current ISA was signed into Law by Late President Musa YarÁdua15 years ago.
Karawusa said the SEC set up an industry-wide committee involving several market experts afterwards to redraft the law and get input from stakeholders.