The capital market has the potentials to bridge the infrastructure funding gap in the country as well as aid economic development, the Securities and Exchange Commission (SEC) has said.
The Executive Commissioner Operations of SEC, Dayo Obisan, identified Sukuk as one of a number of options directly linked to each project that could be explored to extend credit to bridge the infrastructure funding gap.
Obisan was speaking during the annual conference and 30th anniversary of the Finance Correspondents Association of Nigeria (FICAN) in Lagos on the theme: Financing Infrastructure & SMEs for inclusive growth in post COVID-19 economy.
“There are a number of options that can be explored to bridge the infrastructure funding gap. One of such options that have been used in the past is Sukuk.
“In the last three to four years, Sukuk has been used to raise funding for critical projects in various sectors of the economy.
“We also have collective investment schemes, these are individual monies maybe by some institutions, and over N100billion has been done.
“We have about three surviving infrastructure focused funds in Nigeria totalling almost N100billion and there are some that are registered programmes.
“One of them has a programme of N200billion and have only launched N76billion, leaving a lot of room for growth,”Obisan said.
He said SEC has allowed for crowdfunding platforms, that people do not even know each other capable of coming together to fund a business.
These, he said, are the kind of things SEC has available, not only for government, but also for individuals”.
Admitting that there are quite a couple of instruments available in the capital market, the SEC Commissioner stated that the major thing to note was that infrastructure development is a long term thing.
“If in developed countries they are still having constant discussions not only in maintaining, but in enhancing the level of infrastructure they have, it is essential for us in Nigeria to connect the right donation of money, which is long term capital and which is what capital market provides.
He reiterated the commitment of the SEC as a regulatory agency to creating an enabling environment for everyone to be able to access the capital market.
“We know that one of the problems we have in this country is trust deficiency. If someone puts money in a company and it goes down, it affects the trust people have in the market.
“And that is why SEC is taking it very seriously about Investor protection, transparency and fairness in the capital market.
“There is a need for synergy in policy. Predictability of outcome is key, when someone knows that if he puts his money somewhere he is certain of the returns, it engenders confidence in the capital market.”
He enjoined a FICAN to join hands with the government to espouse these opportunities available in the capital market to especially to foreign investors.
He urged Nigerians to see the problem of infrastructure as that which needs to be solved.
We need to probe further to find out the effects of these interventions of government on Nigerians” he added.
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