Why economy remains key to unlocking Nigerian capital markets — experts

To unlock and tap the full potential of the Nigerian Capital market, the gap that exists between the economy and the capital market must be closed, expert says.

Eguarekhide Longe, Chief Operating Officer (COO) of NASD Plc disclosed this at the VFD Group business connect meeting hosted recently in Lagos.

The COO while speaking on the topic, “Integrating the Nigerian capital market with the Nigerian economy”, stated the economy remains the root of the capital market which Nigeria must harness to achieve its goal in the market.

“It is like we are working in one direction and the economy does not really concern us and until we are able to integrate the capital market along with the Nigerian economy, we are going to see a lot more of this epileptic development around our capital market,” Longe said

He said “To extract value, we have to go to the source. I think most of what encapsulate us in Nigeria especially the capital market is the fact that we are scratching the surface and we don’t go to the source and so many areas in the Nigerian economy do not concern the capital market which that has to change.”

Citing Data from CEIC, he disclosed that Nigeria Capital market ranked 84 at 12.6 percent shows that more structured economies have a higher ratio and they have integrated the capital market more.

Longe said “A lot of what is done in the economies is reflected in the capital market unlike Nigeria.”

The COO stated that there is a lack of flow on the area that really matters giving example with the pension sector which is dimpling, adding that most of the money that comes in, doesn’t go to sectors that needs significant development.

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“We keep rotating the same prospects. I remember growing up, there was Unilever, Nigerian Breweries but when we got MTNN on the market and it was a blockbuster, everybody crowded around MTN,” he added.

Meanwhile, speaking on NASDs orientation on capital market, the COO pointed out that there are sectoral areas of opportunities in the market.

“There are some key areas that we need to dive into and we need to go to the source and get that value. And whatever we get out of what we do, we lay at the disposal of our stakeholders and all of this is about forging partnerships.

“Another key area is being deliberate about liquidity arrangements, because there are many people looking for money in this economy, if you knock on the door and we can’t provide a solution, you knock elsewhere because I don’t think it is a one-shop stop,” he said

While speaking on strategic areas that need to be unlock in order to extract value, the COO , disclosed that the NASD research focused on housing, agriculture, unlocking areas like livestock, export, rail transportation which can transform agriculture and others, Nigerian automotive industry, and Fintech.