UK to support Nigerian capital market for sustainable development

The British Government has reiterated its commitment to supporting Nigeria develop its thriving capital market by collaborating with Nigeria’s financial sector through Mobilising Institutional Capital Through Listed Product Structures (MOBILIST) programme.

At two MOBILIST events hosted by the Nigerian Exchange Limited (NGX) and the British Deputy High Commission (BDHC) in Lagos, the UK underlined its commitment to work with Nigeria to enable private capital mobilisation at scale.

The events in the Nigeria’s financial hub brought together stakeholders from across the finance community, including representatives of the Securities and Exchange Commission (SEC) and pension fund industry, to discuss opportunities to solve some of the principal barriers to increasing investment in the SDGs via public markets.

The events come after former UK Foreign Secretary, James Cleverly’s visit to Nigeria last year and his participation in the launch of the partnership between MOBILIST and NGX intended to catalyse greater investment in the SDGs via new investment structures listed on the exchange.

MOBILIST provides investment capital in the form of equity as well as technical assistance to overcome barriers and enable the listing of pioneering products that can mobilise institutional capital at scale to deal with the twin challenges of development and the climate transition.

MOBILIST also offers extensive research and policy advocacy support to highlight obstacles and enhance the environment for issuers, investors, and intermediaries.

Nigeria’s capital market can help contribute to the delivery of the country’s economic goals, including the ambition to transition to clean energy solutions, but needs around $10 billion in financing per year to meet the Sustainable Development Goals (SDGs) by 2030.

According to the Organisation for Economic Co-operation and Development (OECD), the African continent needs additional financing of about USD194 billion annually to achieve the Sustainable Development Goals by 2030.

Closing this financing gap cannot be achieved without mobilising private investment at scale and enhanced collaboration between capital market stakeholders, multi-lateral development banks, development finance institutions and policymakers.

British Deputy High Commissioner, Jonny Baxter, said: “The UK government is committed to supporting Nigeria in the continued development of its capital market to help deliver the country’s economic goals, including its ambitions to transition to clean energy solutions.

“A liquid and well-regulated capital market benefits the entire economy by enabling companies to raise capital to fund their expansion, which in turn helps deliver crucial development, job opportunities and improved incomes.

“MOBILIST’s focus on stimulating the creation of innovative listed products can make a unique and impactful contribution to achieving these objectives.”

Chairman, NGX, Ahonsi Unuigbe, highlighted the need for addressing barriers hindering public listings through collaborative discussions.

“The discussions we have today are crucial as we address barriers hindering public listings and explore actionable solutions. By overcoming these obstacles, we can unlock the full potential of our capital market, enabling more businesses to access the funding they need to grow and thrive. Some of these obstacles are significant such as regulatory challenges, high listing costs, and market volatility.

“An enhanced and efficient listing process will democratise access to capital, nurturing a vibrant entrepreneurial ecosystem, particularly businesses dedicated to the achievement of Sustainable Development Goals (SDGs), can flourish,” he said.

MOBILIST Programme Lead, FCDO, Ross Ferguson said, “MOBILIST is the expression of the UK’s conviction that public markets have a underutilised but potentially critical role in financing sustainable development at scale by mobilising private capital to flow where it is needed most, to the firms that are going to contribute most to solving developmental challenges and help deliver a fair and orderly climate transition for Nigeria.

“We are committed to deepening our relationships in the Nigerian market as we seek to help position Nigeria’s capital markets at the forefront of these efforts.”

Acting Chief Executive Officer (CEO), NGX, Jude Chiemeka, emphasised the impact of the partnership with MOBILIST.

“Our partnership with MOBILIST is geared towards advancing market efficiency, sustainability reporting, and integrating Environmental, Social, and Governance (ESG) principles. This event represents a significant milestone in our ongoing efforts to enhance the performance and deepening of Nigeria’s capital market by promoting sustainable capital flows and enhancing listing diversity,” he added.