The Securities and Exchange Commission (SEC) is working to streamline regulatory processes to facilitate capital raising for infrastructure projects while ensuring robust investor protection, according to its Director- General, Dr. Emomotimi Agama.
This is coming as Nigeria faces a significant infrastructure deficit, estimated at $3 trillion by the World Bank.
Speaking on a Sub-Theme: Nigeria: Funding Economic Transformation Through The Nigerian Capital Market at the WorldStage Economic Summit (WES) 2014 on Wednesday, September 25, 2024 in Lagos, Agama said bridging the infrastructure gap will require a coordinated effort between the public and private sectors.
“Our goal is to establish Nigeria’s capital market as the premier destination for infrastructure financing in Africa,” he said.
Represented at the WES 2024 with the Theme: Nigeria: Setting A Stage For Business And Economic Recovery by Mr. Tunde Kamali, Director, Office of of the Director General, Agama said financing of critical infrastructure was a top priority for Nigeria’s economic recovery as the capital market offers an ideal mechanism for funding large-scale projects, as demonstrated by successful infrastructure bonds and public-private partnerships (PPPs).
“Through the activities of foreign investors, the market is increasingly becoming more efficient and the foreign capital inflows have been used to augment the country’s external reserve with attendant benefits on the exchange rate, all these are geared towards the development of the Nigerian economy,” he said.
At the WES 2024 which also attracted top executives and academicians including Dr. Aminu Maida, Executive Vice Chairman, Nigerian Communications Commission (NCC); Khalil Suleiman Halilu, Executive Vice Chairman/Chief Executive, National Agency for Science and Engineering Infrastructure (NASENI); Prof Diran Akinleye, Head of Department of Economics, University of Lagos (UNILAG); Prof Yaqub Jameelah Omolara, Head of Department of Economics, Lagos State University (LASU), the SEC boss noted that government patronage of the capital market can significantly benefit both the market and the broader economy.
“By issuing bonds or long-term securities, the government enhances market depth and liquidity, attracting institutional investors seeking stable returns,” Agama said.
“This establishes a benchmark for pricing private-sector debt, boosting investor confidence and making the capital market more predictable.
“Increased government involvement signals stability, encouraging foreign direct and portfolio investment while promoting innovation and improved regulatory frameworks. Over time, government participation can lower borrowing costs for both the public and private sectors, fostering economic growth by channelling funds into key infrastructure and development projects. This stimulates the broader economy, creating jobs and enhancing productivity, which in turn benefits the capital market.
“Additionally, government engagement in the capital market can encourage public-private partnerships, offering investment opportunities while mitigating risk. It also provides investors with avenues to diversify their portfolios, reducing risk and fostering more stable returns. Finally, by offering secure investment instruments, government participation deepens domestic savings, allowing citizens to earn returns on their savings while contributing to national development.
“The Nigerian capital market continues to serve as an important pillar for the stability of the financial system, acting as a crucial conduit for the flow of capital and the efficient allocation of resources. By enabling businesses to raise funds and offering investors diversified opportunities, the capital market supports economic growth and strengthens corporate governance.
“It is important to recognize the indispensable role that our capital market plays in fostering sustainable development. A well-functioning capital market is the bedrock for long-term capital formation, enabling critical investments in infrastructure, energy, agriculture, and technology—sectors essential to Nigeria’s economic transformation.
“The Nigerian capital market is more than just a platform for raising funds; it is a reflection of our nation’s economic health, a vehicle for wealth creation, and a barometer of investor confidence. It is through this market that we can channel investments into projects that will stimulate growth and development.
“From traditional equity markets and bonds to innovative instruments like green bonds and sukuk, the capital market offers diverse options for funding the sectors that will drive Nigeria’s future prosperity.
“The capital market has a critical role to play in economic growth and development of a country and the Nigerian capital market has not been left behind in performing this role.
“The Nigerian capital market has funded critical public and private project from both local and international issuers and investors.
“Specifically, Governments at various levels in the country have at different times resorted to issuing bonds in the capital market to fund key development and infrastructural projects.
“Equally, the equities segment of the market has provided funding for companies to expand operations and for the government to privatize and divest ownership of its enterprises.
“In addition, both domestic, institutional, and retail investors have participated in the capital market to earn income and generate employment.”