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Tackle rising insecurity to sustain market growth, investors urge government

By Helen Oji
27 April 2022   |   2:12 am
Investors have stressed the need for government to address security challenges to guarantee stable economic growth and safe investment.

Stocks

Investors have stressed the need for government to address security challenges to guarantee stable economic growth and safe investment.

In addition, they urged the government to ensure that preparation for the 2023 poll does not disrupt economic activities, especially the stock market.

According to investors, the growing insecurity scare has been posing a serious threat to efforts put in place to restore investors’ confidence and attract foreign direct investments into the market.

They argued that war, insecurity and social disorder are disincentives to investment, noting that no investor would stake his fund in a country where his investment cannot be protected.

Recall the equities market defied Easter trends, as the performance indices of the market (the All-share index and market capitalisation), rose significantly since the beginning of the month.

The rally caused the value of listed equities to increase by over N900 billion or 4.8 per cent from the beginning of the month while the cumulative value of listed equities rose to N26, 125 trillion as of Friday, April 22, from N25, 216 trillion and 48,458.65 points from 46, 687.85.

They, therefore, suggested that government must create an enabling environment to protect investment, sustain the current growth trajectory witnessed in the market and attract new businesses to the country.

Specifically, President of the Proactive Shareholders Association of Nigeria, Taiwo Oderinde said the level of security in a particular jurisdiction is a major factor that attracts or lures foreign investors to the market before the issue of return on investment is considered.

He pointed out that the issue of insecurity and chaos is a major impediment to the ease of doing business anywhere in the world, adding that no business can thrive in an unstable environment.

He urged the government to rise to the expectation and tackle the menace to grow the economy and sustain a stock market rebound.

The Publicity Secretary, Independence Shareholders Association of Nigeria, Moses Igbrude pointed out that virtually all the stocks in the market are currently undervalued due to uncertainties and fear, leading to investment apathy.

He said the rising insecurity in the country requires the government to adopt short, medium and long-term strategies to tackle the menace.

“Where there is insecurity, the operating environment cannot be stable to do business and if the operators continue to operate in such climes, businesses cannot do well. This is exactly what is happening to businesses and the capital market.

“Economically we are not making progress due to the security situation of the country. It is affecting the capital market because no investor will want to put his investment in an environment that is not safe,” he said.