SEC urges LFZ to enlighten investors ahead of NGX listing
Ahead of the proposed listing of the Lagos Free Zone (LFZ) on the Nigerian Exchange Limited (NGX), the Director-General of the Securities and Exchange Commission (SEC), Lamido Yuguda, has urged the management of the firm to step up its enlightenment campaign to deepen investors’ knowledge on the operations of the zone.
Yuguda, who stated this during a meeting between the SEC, the Nigeria Export Processing Zones Authority and the Lagos Free Zone, said this would further enlighten potential investors on the operations of the Zone.
The SEC Boss stated that there is a lot of ignorance among investors on the operations of the zone, adding that when companies are planning to access the market there is need for aggressive investor education to enable investors to make informed decisions.
According to him: “When you come to the market to list, you need to massively educate people. The reason why companies list is to be able to have access to a wide range of investors.
“The most important thing is cash flow. If you have a positive cash flow over a long period of time, it makes your company attractive to investors. If you add this to the fact that you are operating in a NEPZA regulated free zone, that is an added advantage.
“Investors would need to have as much information as possible about the operations of your company, especially since it operates within a Free Zone. They want to know how the NEPZA Act affects your cash flows, and what is available to investors.”
Yuguda stated that given the quantum of development and investment domiciled within the Free Zone, it holds the key to Nigeria’s future and commended the management for already contributing immensely to the economy by attracting international brands like Kellogg’s, Dano, BASF and Colgate to the Zone.
He pledged the SEC’s backing to ensure that the Free Zone remains attractive to investors and all other stakeholders by providing prompt regulatory backing where necessary.
In his remarks, Chief Executive Officer Lagos Free Zone, Dinesh Rathi, said his organisation has assisted in creating employment for more than 7,000 people and investment has also gone up considerably since they commenced operations.
Rathi expressed appreciation to the SEC for their support and progress on the draft regulation, which would enable the zone to access the capital market.
He said, “We hope the entire regulatory framework on Free Zone listing is completed by April. We solicit your support, as this will pave the way for other operators who are having their own free zones to follow suit.
“Listing is not only a financial step, but will also help deepen the market and attract more investors. Listing creates a lot of positivity.
“Once the Free Zone is listed, part of the port gets listed too. In the future, there is a possibility of the port also coming to the market. It is very crucial in a lot of ways and the faster it is done the better for all. We want to get past the finishing line quickly”.
Managing Director of the Nigeria Export Processing Zones Authority, Prof. Adesoji Adesugba stated that the aim of the Free Zone scheme was to bring companies that are far to operate within Nigeria where they can build their factories, employ Nigerians and also export their products using the relevant laws beneficial to them.
Adesugba said he prefers that Nigerians also benefit from the profits of companies operating within the country hence his support for the listing desire of the LFZ.
“I would not want people to come here, develop a port and take away 100% profit without Nigerians benefiting from it. We need to design the regulations in such a way that the funds that are coming from the capital market suits our purposes,” he said.
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