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Leverage capital market to finance revenue-generating projects, stockbrokers tell FG

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Capital market

The Federal Government (FG) has been urged to focus on raising bonds from the capital market to financing revenue-generating projects and reduce balance sheet borrowing.

These among others were part of the resolutions reached at the Securities and Exchange Commission (SEC) yearly Budget Seminar with the theme “Financing Nigeria’s Budget and Infrastructure Deficits through the Capital Market” held virtually Thursday.

The operators pointed out that government remains an enabler to creating the conducive enabling environment for policies, security and good leadership that will ultimately support business growth and development.

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Therefore, they urged the FG to prioritise funding of sectors such as security, education and health while creating an enabling environment for the private sector to thrive.

They also stressed the need to develop an investment framework including an enabling legal and regulatory policy, which represents contracts and compensates investors when necessary.

They said this would ensure that there is a viable and attractive investment environment to attract and retain investors.

“There is need for strategic collaboration between the public and private sectors for flexible, accessibility of funds through the capital market to finance infrastructure.

“The development of infrastructure in Nigeria has primarily been through the traditional forms of contract awards by the government, through budgetary allocation. Private sector involvement is key, and the Federal Government has identified the power and transport sectors as key for overall development. Hence prime candidates for Public, Private Partnership.

“The success of PPP projects lies in creating an enabling environment for both private and public sectors. The public sector needs to prepare well-structured and bankable PPP to attract private investments while safeguarding public investments,” they added.

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In her remarks, Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, Minister said the capital market has been supportive in providing the necessary funds needed to finance long-term projects.

Ahmed said the capital market therefore serves as an important channel through which government budget and infrastructure deficits can be financed, noting that government is committed to introducing more of these instruments and partner with the capital market to finance projects for economic growth.

“The capital market is a room for various programmes and mechanisms that are targeted at aggregating and channeling long term capital for businesses and development. The Nigerian capital market has been doing this for many decades and has the potentials to do more.

“I want to urge the capital market participants and operators to consider retail investments to give opportunity to the Nigerian citizens to invest within the capital market in an easy and simple way.”

Director General of the SEC, Lamido Yuguda said the 2021 budget proposes a deficit of N5.6 trillion, and 42 per cent of this will be financed using domestic sources.

According to him, it is expected that the capital market will be leveraged to generate the needed funds and boost infrastructure development in the country.

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