FG hints of more tax incentives for infrastructure and capital markets.

Minister of Finance, Budget and National Planning, Zainab Ahmed, while delivering her keynote address at the opening ceremony of the BusinessDay conference on Investing in Capital Market in Abuja, said the strategic policy is to help strengthen and complement the crucial relationship between fiscal policy, the regulatory environment and the strong capital market in Nigeria.

Zainab also hinted of new long-term plans covering a period of 20 years beginning from 2021 to 2040.

“An important next step will be to transition our 2017-2020 Economic Recovery and Growth Plan to a successive long-term Vision 2040 Plan. To this end, I am currently working with the Honourable Minister of State Budget and National Planning to prepare a Medium-Term Economic Growth Acceleration Plan for 2021-2024 as a successor to the ERGP.

She noted that the theme of the conference “market recovery, innovation and regulation in Nigeria”, is apt in the sense that it is aimed at addressing the enormous challenges currently facing the nation’s capital market. She added that the federal government has also put in place other polices that will boost investors confidence in the sector and generally in the Nigerian economy especially the Draft Finance Bill.

“Amongst these strategic objectives is the introduction of tax incentives for investments in infrastructure and capital markets, and specifically the introduction of Tax Rules to complement existing SEC Regulations for Securities Lending Transactions on The Nigerian Stock Exchange.

“The Draft Finance Bill, which accompanied the 2020 Executive Budget Proposal submitted by President Muhammadu Buhari to the National Assembly on October 8, 2019, included five strategic objectives aimed at achieving incremental but necessary changes to the country’s tax and fiscal laws.

“Amongst these strategic objectives, is the introduction of tax incentives for investments in infrastructure and capital markets, and specifically the introduction of Tax Rules to complement existing Security and Exchange Commission (SEC) Regulations for Securities Lending Transactions on The Nigerian Stock Exchange. This strategic objective recognizes the crucial relationship between fiscal policy, the regulatory environment and the strong capital market we all seek to ensure in Nigeria,” she said.

The Minister noted that Nigeria’s capital market is crucial to actualizing and achieving the sustained, inclusive and equitable socio-economic growth that this Government aims to achieve.

She stressed that the capital market is key to the mobilization of long-term savings for investment as well as efficient pricing of financial instruments. She added that it has provided a necessary platform through which the business sector and Government have been able to source for capital to expand their operations and provide public goods and services for the citizens.

“Therefore, we recognize the importance of maintaining a competitive, resilient and innovative capital market through, in part, the development of appropriate policies, and a strong regulatory and enabling environment, and continued implementation of the ten-year Capital Market Master Plan (2015 to 2025), aimed at positioning the Nigerian capital market for accelerated development of the national economy.

The Minister stated that government in 2020, plans to issue a Third Green Bond, “with which we intend to triple Nigeria’s GHG emission reductions, stimulate economic growth and drive investment in social programmes such as education and health.

Zainab said government is currently exploring the use of so-called “jollof bonds” to fund infrastructure.

“To this end, during the recently concluded 2019 Annual Meetings of the IMF and World Bank, we met with UK Authorities to advance discussions regarding their commitment to support our infrastructure financing through the possible issuance of jollof bonds.

“Already, a working group is being set up to work on Naira denominated, internationally traded bonds. The Central Bank of Nigeria is leading this effort. We will explore all options on this at the next UK Investment Summit in January 2020.

In his address, the publisher of BusinessDay,   Frank Aigbogun, stressed the importance of capital market to the economic development of Nigeria and tasked the government and all stakeholders to make the required efforts to ensure that the Nigerian capital market the preferred place for investment.

The publisher of BusinessDay,   Frank Aigbogun, in his welcome address, stressed the importance of capital market as vehicle for long term investment

Aigbogun pointed out that although the capital market remains one if the best channels for such investment, but warned that with the current state of affairs, this will be a hard sell for any player in the sector.

“ At both local and international forums, the recurring questions are; when will the Nigerian Capital market recover and what are the regulators doing to this effect.”

Aigbogun who also noted that “ investors have lost N1.5trillion, due to speculations occasioned by the absence of catalyst that will attract local and foreign investors back to the market”, however, tasked the government and all stakeholders to make the required efforts to ensure that the Nigerian capital market the preferred place for investment.