States seek review of fund-raising processes in capital market
State governors have urged regulators to review processes involved in raising funds in the Nigerian capital market to make it easier and more attractive for subnational to raise funds for long-term projects in the market.
The governors, who spoke at the maiden Nigerian Exchange Limited (NGX) conference held in Lagos, expressed concern about the regulatory bottlenecks and encumbrances involved in the process of capital raising in the market.
They stressed the need for the Securities and Exchange Commission (SEC) to introduce a checklist review process for the issuance of debt securities, which will help to reduce the time to market debt securities and encourage more issuances.
Specifically, the Governor of Edo State, Godwin Obaseki, said there is a need to review the turnaround time for approval of proposals for capital raising.
According to him, the adoption of digital technology, processes and procedures for fund raising can be made easier while time within which approval is given by the commission for issues and fund raising could would be reduced significantly.
“Market regulations need to be reviewed, the market is becoming smarter now, if there is a viable project, one should be able to go to the market and raise money easily.
“Due to regulatory encumbrances present in the market today, we have not approached the market to raise funds but have raised through other forms,” he said.
However, Obaseki charged sub-nationals to come up with long-term developmental programmes with investment needs and continuity plans to drive growth.
“The market needs to see that the state has a long term capital. Some sub-nationals have not come up with infrastructure and developmental programmes. When you have this sort of initiative, the market will take you seriously.’
Governor of Sokoto state, Aminu Tambuwal said regulators should look at developmental projects of the sub-nationals and support their fund raising exercise without considering their time frame to leave office.
He pointed out that regulators ‘develop cold feet’ in approving proposals from sub-nationals that have limited time to stay in office due to doubt on the continuation of the project upon which the money is being raised, especially in the event of exit from office.
Tambuwal urged regulators to desist from such act to accelerate development and forestall delay in execution of long-term projects
He argued that government is a continuum, stating that sub nationals should be granted approval to raise funds irrespective of the duration of exit from office.
“We must begin to see the government as a government not individualizing governance. Regulators should look at programmes not individual governors or time frames to leave office. Subnational should be properly guided on how to access funds in the NGX to drive development.”
Chairman, Nigerian Governors’ Forum (NGF), Dr. Kayode Fayemi said Ekiti state currently has a state-owned enterprise which is being concessioned to private sector operatives.
He said plans are underway to turn around these assets and subsequently list them on the exchange.
“There are opportunities for the capital market to look at the wider market and there is also a need to look beyond the traditional way of raising capital to deepen the market.”