Uwaleke calls for NNPCL’s capital market listing to drive economic growth

Uche Uwaleke, Nigeria’s first Professor of Capital Market, has urged Nigerian National Petroleum Company Limited (NNPCL) to take a bold step by listing on the capital market, emphasising that the move would enhance transparency, attract investments, and boost economic growth.

Uwaleke made the call at the 50th inaugural lecture of the Nasarawa State University, Keffi, on Wednesday in Abuja.

The university don argued that Nigeria’s low productivity is largely due to inadequate infrastructure, particularly in power and road networks, which can only be sustainably financed through long-term capital available in the capital market.

In his words, “With ongoing improvements in the macroeconomic environment, accessing long-term capital remains crucial for accelerating economic growth. Therefore, I propose the adoption of the IPO (Incentives, Privatization, Optimization) approach to enhance Nigeria’s capital market, mobilize long-term funds, foster entrepreneurial knowledge ecosystems, and unlock wealth.

He urged the Federal Government to raise development funds by selling stakes in state-owned enterprises through the Exchanges. For example, the FG can facilitate public investment in the oil and gas sector by establishing a Special Purpose Vehicle (SPV) and listing it on the Nigerian Exchange.

“In fact, there is no reason why the NNPC should not now be listed on the NGX. Even if it is 5 percent. Other countries like Saudi Arabia and Norway did that with their national oil companies. Nigeria can also take a cue from them. We have our refineries that can also be taken to the capital market.”

The professor emphasized that the privatization of government enterprises remains a vital strategy for mobilizing substantial funds for infrastructure development.

Citing data from Nigeria’s Ministry of Finance Incorporated (MOFI), he noted that over 70 entities have been recorded in a national asset register designed to identify and unlock the value of idle assets across the country.

He further recommended that the government promote investments in Real Estate Investment Trusts (REITs) to generate capital for housing development and establish a strong secondary mortgage market to enhance access to affordable housing finance.

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As a Professor of Capital Market, he urged the federal government and sub-national entities to leverage infrastructure bonds, such as Sukuk and Green Bonds, when borrowing from the debt capital market to finance renewable energy projects, smart cities, and environmentally sustainable developments.

He said that Malaysia’s high-quality infrastructure has mainly been due to the government’s ability to leverage the capital market in the implementation of its five-year economic plans to execute major infrastructure projects.

The professor emphasized that universities should explore capital markets by issuing bonds to meet their funding needs, rather than relying solely on government allocations, which are often insufficient to drive meaningful societal impact.

He noted that bond issuance is a common practice among universities in the United States, particularly within the Ivy League. Prestigious institutions such as Harvard, Yale, MIT, Stanford, and Princeton are among the top borrowers, benefiting from support provided by credit rating agencies. This trend is also gaining traction in Mexico, Canada, and the United Kingdom, with Moody’s, a leading global credit-rating agency, rating universities in these countries.

However, he acknowledged that bond markets tend to favor large and reputable universities while imposing higher interest costs on smaller institutions. To address this, he suggested that the Federal Government encourage first-generation universities to issue government-backed bonds to enhance their financial stability. Additionally, he urged the National Universities Commission (NUC) to introduce regular rankings of Nigerian universities to attract interest from rating agencies.

He further recommended that the government incentivize universities by implementing a tiered corporate tax system that favors publicly listed institutions, along with tax breaks for newly listed companies for a specified period. Given the critical role universities play in fostering entrepreneurial knowledge ecosystems, he argued that providing incentives for them to access long-term funding is essential.

On privatization, the professor reiterated that listing state-owned enterprises on the stock exchange remains a powerful tool for driving investor confidence and unlocking capital. He advised the Federal Government to sell stakes in these enterprises through the exchanges as a means of generating development funds.

Commenting on recent economic trends, he highlighted the recorded improvements in government revenue and the reduction in the debt service ratio from over 80% to below 70%, attributing these gains to ongoing reforms. He also emphasized that the proposed tax reform bill would enhance the ease of doing business, foster SME growth, and improve the macroeconomic environment.

He concluded by stating that unlocking Nigeria’s hidden wealth through the capital market requires leveraging its potential to mobilize resources, allocate capital efficiently, and expand the entrepreneurial knowledge ecosystem.

To achieve this, governments at all levels must adopt the right strategies, including providing effective incentives for capital formation, privatizing public enterprises through the capital market, and optimizing resources to ensure value for money.

“Only then can Nigeria be truly seen as being on the right path to unlocking its vast hidden wealth,” he stated.

The lecture was titled: “Unlocking Wealth and Leveraging Entrepreneurial Knowledge Ecosystems: Understanding Capital Harnessing Essentials.”