‘Two per cent growth for Nigeria is unacceptable’
According to them, with a population growth of 2.6 yearly, failure to grow the economy at an average of 5-7 per cent in the next five years is tantamount to taking the nation to the ditch.
However, to achieve a sustainable economic growth, the experts maintained that capital market development in Nigeria must remain a key policy issue going forward, to foster savings and investments for inclusive growth.
Indeed, they noted that the Nigerian capital market continue to present untapped opportunities for sustainable economic growth, adding that if government would recognise and leverage the position of the capital market in the area of capital formation, it would go a long way to boost revenue base and increase Gross Domestic Product in a sustainable manner.
According to them, at less than 20 per cent of the country’s GDP, the current size of the capital market constrains its role in national economic development.
Specifically, a chartered stockbroker and Professor of Finance and Capital Markets in the Banking and Finance Department of Nasarawa State University, Uche Uwaleke, said it is disheartening to note that the government’s growth document seems not to recognise the place of the capital market in capital formation and economic growth.
He wondered why local institutional investors, such as pension funds and mutual funds are less active in the equities market with asset allocation concentrated in government bonds and Treasury Bills, generally considered safe and liquid.
According to him, stockbrokers must continue to advocate for interventions that would connect the capital market to economic development.
Furthermore, he argued that the economy would not record reasonable level of growth if domestic borrowings, through the capital market were not tied to project development.
“We must refocus our business model and engender trust. For instance, how will the privatization done in Nigeria.
If we end up privatizing the companies to very few hands, poverty would continue and we will not grow.”
An economist, Biodun Adedipe, explained that two per cent yearly growth would not spur sustainable economic growth, considering the huge population of the country.
According to him, there is need to de-risk investments in the bourse and introduce market products that would be used to hedge a countless array of risks.