The Securities and Exchange Commission (SEC), in collaboration with capital market stakeholders have urged the federal government to accelerate market growth by introducing pro-capital market measures into the national budget.
This was part of the resolutions at third Annual Budget Seminar of the Securities and Exchange Commission (SEC), with the theme, “Budgets, Elections and Capital Markets: Risks and Opportunities in 2019,” in Lagos, yesterday.Specifically, a professor of Capital Market and Head, Banking and Finance Department, Nasarawa State University, Keffi, Uche Uwaleke, noted that five emerging countries that have adopted such measures as part of their budget have recorded increased level of economic growth.
“Some emerging African countries have recognised that it is important to include pro-capital market measures in the budget like reducing listed companies’ income tax and clauses that allow privatisation through the capital market.“Pakistan for instance, is looking at reducing company income tax for listed companies, while India on the other hand, plans to privatise through the stock exchange.”
Uwaleke also said government as a necessity must encourage the consumption of local products to buoy growth of listed companies on the equity market, and enable them compete favourably in the global economy and deepen the market.“Government at all levels to step up patronage of locally made goods. We have to change our attitude in believing that imported things are superior to local goods. We have locally-made goods, which are of similar value and quality.”
In her remarks, Acting Director General of the Securities and Exchange Commission, SEC, Ms. Mary Uduk, said while the local and foreign investors are interested in the nation’s budget and the level of implementation, the capital market is looking at the impact of the budget, and how the market can aid its implementation.
“The capital market is very important in accessing long term funds for capital projects. The capital market can fund budget deficit. We are interested in driving and contributing to this economy. We believe there are a lot of opportunities for the capital market in the budget.”
The Head Economic Research, SEC, Dr. Afolabi Olowookere, said opportunities abound for equity and sub-national issuances as a means to fund the budget.He stressed the need for state governments to also explore the capital market for funding, even as the federal government continues to reduce domestic borrowing to create more opportunities for private issuances.“The budget can be funded through the creation of money market-based instruments and trading, Commodity trading, and derivatives, investing in eligible companies under Tax Credit Scheme as well as attracting restructured oil assets to list.”