Nigeria’s capital market to reinvent self through new invigorating legislations

Nigeria’s capital market, in the shortest possible time, will likely see a set of new legislations that could help invigorate its activities, which had been battered, especially in recent times by slowing economy, profit-taking and currency volatility.

Bukola Saraki, Senate president, said on Monday that the National Assembly was troubled by the downturn compounded by eroding confidence, as he gave assurances of the NASS to expedite actions on relevant legislative proposals that could reverse present trend.

The stock market of Africa’s largest economy crashed by N1.732 trillion within one year of the Muhammadu Buhari-led Federal Government, as Nigerian Stock Exchange data indicated market capitalisation stayed at N9.926 trillion as of May 27, 2016, down from N11.658 trillion, as of May 28, 2015.

Investors in the equity category lost over N1.053 trillion in the first quarter of 2016, according to reports, as equities market depreciated by 10.79 percent.

Speaking at the opening of a two-day stakeholders’ forum on, “Realising the full potentials of the Nigerian Economy through proactive capital market legislation,” which began yesterday in Abuja, Saraki said something needed to be done and “urgently too.”

Saraki therefore called on stakeholders to come up with draft bills that would provide adequate legislative instruments to fast track the necessary change and reforms expected in all critical sectors of the country.

“If we give us those bills, we will expedite actions on them,” Saraki said, as he delivered a goodwill message at the event organised by the National Assembly Joint Committee on Capital Market and Institutions in collaboration with the Securities and Exchange Commission (SEC).

The Senate president disclosed that economic reform bills that would make Nigeria investors’ friendly were already at critical stages at the upper legislative chamber.

These, he listed, to include: Independent Warehouse Regulatory Agency Bill, Secured Transactions in Movable Assets Bill, Franchising Bill, Companies and Allied Matters Act (Amendment) Bill, Nigerian Ports and Harbours Authority Bill and Nigerian Railway Authority Bill.

“I hope that when you leave here at the end of the two days, what I will like to see is a working document with a clear timetable, listing the draft bills that you want us to pass.

“The 8th National Assembly understands the issue that Nigeria is going through. And I can assure you to give us those bills, we will turn them around and pass them as soon as possible,” he stated.

On his part, Vice President Yemi Osinbajo said Nigeria’s capital market requires a stable macro-economic environment, strong legal and regulatory framework to protect property rights, good corporate governance as well as strong financial infrastructure.

Represented by the special adviser to President Muhammadu Buhari on Economic Matters, Adeyemi Dipeolu, the Vice President said the capital market had a key role to play in helping to finance domestic borrowing plans.

The Federal Government will borrow N984 billion from domestic markets to finance the N1.84 trillion deficit 2016 budget of N6.06 trillion.

“We need the capital market for the mobilisation of finance. And to mobilise that finance, there is the need for enforcement of rules and regulations which are the bedrock of capital investment”, he said.

He harped on the need for the review of existing laws such as the Investment and Securities Act, 1999. This, he stressed, will give full impetus to the potentials of the capital market.

In his address, Speaker, House of Representatives Yakubu Dogara pointed out that the lower house is in the process of tightening regulations in the stock market to ensure that the investments are protected from fraudulent operators.

Dogara said this has become imperative in view of the fact that the nation is in dire need of investors to bring in their resources to diversity its sources of income.

His words: “We strongly believe that the Capital Market is a major tool for wealth creation and mobilisation of funds to grow and diversify the Nigerian economy. We want to emphasise that any proposed legislation must find a way to protect ordinary Nigerians, some of whom have invested their life savings in the market from fraudulent market players. Many Nigerians have tales of woes from the irresponsible activities of these unscrupulous stakeholders in the market. The recent regulatory sanctions to some stock brokers and market players is, therefore, a step in the right direction.”

Going further, the Speaker stressed that the capital market offers the best opportunity to diversify the economy by bringing fresh vistas and windows for investment, while expressing confidence that the capital market can fill this gap by taking the lead in yielding opportunities that will help in revamping Nigeria’s economy.

He expressed the willingness of the House of Representatives to contribute “our quota, to arrest this dangerous drift. Considering Nigeria’s population, human and material resources, our Capital Market could do much better in terms of depth, breadth, size, liquidity and access to investment opportunities.”

He also noted that Nigeria as a nation is blessed with what it takes to be economically self sufficient but must look inwards to ascertain the reason why it has not been able to attain that status.

“At the heart of these questions must be the realisation that deep calls unto deep. Anything of valour is never found on the surface. Concomitantly, for our market to deliver its full potentials, it must be deepened. This, I believe is the major challenge before all of us here today,” the speaker said.

He called on all stakeholders to work together to ensure that Nigeria’s diversification drive achieves its full potentials, saying, “As major stakeholders in the Nigerian-project, the National Assembly strongly believes that a pro-active engagement and collaboration between the legislature, the executive and Organised Private Sector, will help to achieve the economic potentials of the Nigeria’s Capital Market. It is indisputable that continued collaboration and buy-in of major stakeholders in the Public and Private sectors is one of the major ways of attaining the lofty ideals and salient objectives of the Nigerian Capital Market Master Plan”.

Also, the President, National Council of the Nigerian Stock Exchange Aigboje Aig-Imuokhuede called for inclusive economic growth and promotion of a National Savings Culture.

While saying that investors invest based on facts, he noted that a situation where the enabling environment does not suggest certainty in terms of the application of financial realities and principles, creates uncertainty and volatility in the market.