Experts in investment banking and Nigeria’s capital market have called for a need to raise long-term capital for the real sector of the Nigerian economy to accelerate the pace of development in Africa’s largest frontier market.
The finance professionals made the call Tuesday at the launch of a book titled ‘Frontier Capital Markets and Investment Banking: Principles and Practice from Nigeria’ authored by Temitope Oshikoya, managing partner of Nextnomics Advisory, and Kehinde Durosinmi-Etti, former group managing director of the defunct Skye Bank plc.
The book, which contains 16 chapters divided into six parts, discusses the role of the capital markets and investment banking in Nigeria, according to Durosinmi-Etti.
Beyond the portfolio investment Nigeria currently enjoys, the country needs “to attract long-term funds to grow the real sector”, Ndubuisi Nwokoma, a professor of Financial Economics at the University of Lagos and one of the book reviewers, said. “For us to develop the Nigerian economy, we need to attract more foreign direct investment,” he said.
In the first quarter of 2019, Foreign Portfolio Investment into Nigeria jumped 56.5 percent to $7.14 billion from $4.56 billion recorded in the corresponding period of 2018, while Foreign Direct Investment nosedived by 1.32 percent to $243million against $246.6 million achieved a year earlier, according to data obtained from the National Bureau of Statistics (NBS).
Foreign Portfolio Investment is “quick money”, according to Nwokoma, stressing that the newly launched book would help create more awareness for those in the academia and practitioners in the industry to revive the principles and practices of investment banking and capital markets operations to enhance the economy.
Long-term capital is very critical to the development of infrastructure, according to Konyin Ajayi, professor of Law at Babcock University and Senior Advocate of Nigeria (SAN), who also reviewed the book. “Without this, there can be no meaningful development in the country.”
Ajayi noted that there is currently no book in the country which combines the history of investment banking, capital market, current issues on these two and the way forward. Hence, indicating the novelty of the book.
The reviewers explained that the new book explores capital raising through equity underwriting, debt underwriting, and private equity, paying particular attention to putting capital to work on mergers and acquisitions, project and infrastructure finance and real estate finance.
Former Minister of Power, Works and Housing, Babatunde Raji Fashola, who was the chairman of the event, urged stakeholders in the nation’s financial sector to embrace more investment in infrastructure.
“The omens are good for Nigeria,” the former minister said. “There is a gap in financing and that lies opportunities for investors, bankers, capital market operators, among others.”
Speaking on the rationale behind the book, Oshikoya said Durosinmi-Etti and himself thought it was important for them to document developments in the nation’s capital market to enable students, policymakers and international investors to know the attractiveness of the Nigerian markets.
“A lot is being done in the Nigerian capital markets that are not well documented for the future generation,” Oshikoya said. “It is important to show Nigeria is the largest frontier market in the world.”
At the end of the reviews, the book was unveiled and presented by Oba of Lagos, Oba Rilwan Akiolu, in the company of Oba Kabiru Shotobi, the Ayangburen of Ikorodu, former minister Fashola, Fola Abiola, chairman of FATE Foundation, and the two authors.
