Nigeria-UK capital markets project targets increased capital flows

The Nigeria-UK Capital Markets Project, a collaborative initiative of the Emerging Capital Market Taskforce (ECMT) in both countries, is working to shore up confidence in Nigeria’s capital market as well as ensure increased capital flows between Nigeria and the UK.

A report of the group presented to Lagos State governor, Akinwunmi Ambode by Aigboje Aig-Imoukhuede, president, Nigerian Stock Exchange (NSE), and Roger Gifford, former Lord Mayor of London, who both serve as co-chairs to the UK Emerging Capital Markets Taskforce in Nigeria, notes that the initiative will be focusing on market integrity, regulatory infrastructure, enhanced market incentives and greater diversity in what would enhance liquidity within the markets.

One of the key recommendations in the report, according to the group, is the establishment of a platform through which market participants can collectively focus on key issues around market development.

The Nigeria delivery group, the local execution arm for the emerging capital markets task force and a collective make up of capital markets operators, regulators, platforms and experts, has already responded to the recommendation by pledging to institutionalise their interim structure.

The report, which is to be the first in a series, is the product of several months of collaborative work between the Nigerian Capital Markets Solicitors Association and the Law Society of England and Wales.

Top on the recommendations of the report include: establishing a broad industry platform made up of industry participants to represent their interests; developing initiatives to raise transparency, corporate governance and performance standards across the industry, and canvasing for relevant legislation and regulatory changes.

Also, the recommendations focus on boosting the integrity of the markets by improving information disclosure, reducing the potential for manipulation, promoting transparency and good governance, and generally improving the standards.

Other focus areas of the recommendation are: reduction of the cost of capital markets transactions and tightening of the regulatory enforcement process; introducing an efficient and reliable dispute resolution mechanism as a central mechanism to secure investor confidence; reforming elements of the tax system for the markets, alongside a broader suite of additional incentives to deepen capital market activity.

Governor Ambode said the Lagos State government would key into the initiative and, particularly focus on the areas that concern Lagos, not only as the host of the key platforms including the NSE, but as the largest issuer of sub-sovereign bonds in the Nigerian capital market.

“The capital markets can indeed provide more robust capital flows into the various economic sectors, not just for the state government, but also the millions of young entrepreneurs who see Lagos as a place where they can realise their hopes and dreams, by empowering our small and medium scale enterprises, and larger companies, with greater access to longer term capital and introducing innovative financial products,” Governor Ambode said.

Ambode also assured that his administration, aside creating an enabling environment for protecting investments, would also ensure an efficient judicial dispute resolution and arbitration system.

“I can commit myself to say that we would create an atmosphere where our judicial officers can actually sit down with capital market operators for us to find a channel to boost the objective of this project”, he said, adding that his administration was committed to working closely with the taskforce delivery group to look at the recommendations as it affects Lagos state and work towards implementing same.

Speaking on the report, Aig Imoukhuede, said “not only has significant time and effort been put into the research and delivery of the report, but the collective action of a broad group of market participants behind an initiative to enhance our capital markets over the long term is a very positive move.

“I am delighted with the quality of the report, I look forward to working with the delivery unit and all other stakeholders to take forward its recommendations and I am particularly happy to see the level of interest within the Group to institutionalise this new structure for long term benefit.

“I would like to thank the group’s leadership, as well as Sir Roger Gifford and his team for their hard work and for achieving the level of momentum we now have.”

Commenting, Sir Roger Gifford said: “I am impressed by the dynamism and energy of the people I have met in the capital markets sector, and I believe that their commitment to the reform of Nigeria’s capital markets can benefit both people and economy, allowing greater access to funding for companies, and investment opportunities for institutions and individuals, both at home and abroad.”

Elizabeth Uwaifo, one of the report’s co-authors, speaking on behalf of the Nigeria delivery group said: “On behalf of the members of the Nigeria Delivery Group I am delighted to present the preliminary findings and recommendations of this project’s first report. I am also delighted at the cohesive way in which this group has worked as a collective, with the common goal of deepening our capital markets for long term growth.”

JOSHUA BASSEY & EDOZIE IFEBI