For the Nigerian economy to survive the negative impact of COVID-19 pandemic, some stakeholders in the financial market have offered solutions that would help boost the economy.
Uche Uwaleke, a Financial Economist and a Professor of Capital Market at the Nasarawa State University Keffi has called on the Federal Government to partially privatise government assets such as the Nigerian National Petroleum Corporation through the Nigerian Stock Exchange (NSE).
Uwaleke who stated this in a presentation delivered at the Capital Market Correspondents Association of Nigeria (CAMCAN) 2020 workshop tagged: “The Capital Market in Post COVID-19 Nigerian Economy”.
He advised the Federal Government to deploy proceeds from the sales to recapitalise development financial institutions such as the Bank of Industry (BoI) and Bank of Agriculture (BoA).
Uwaleke also advocated the partial privatisation of the Nigerian Commodity Exchange (NCX) and called on government to put in place policies to support the commodity trading ecosystem.
Uwaleke, who canvassed provision of fiscal incentives for companies listed on the Securities Exchanges, urged the Federal Government to pursue aggressive export-based diversification to reduce vulnerabilities to external shocks and boost the external reserves.
On infrastructural development, the don called on the government to address infrastructure gaps through Public Private Participation, issue more infrastructure bonds such as Sukuk and Green Bonds which are tied to self-liquidating projects.
While charging the government to tackle insecurity and continuously improve the ease of doing business, Uwaleke called on the Central Bank of Nigeria (CBN) to continue to deploy policies favourable to stock market growth and which support economic recovery.
“The CBN should consider scaling up its development finance efforts especially as they relate to the agriculture value chain,” he said.
On the way forward for the Securities and Exchange Commission and Self Regulatory Organisations, Uwaleke called for the strict enforcement of the corporate governance codes for listed companies to boost investor confidence, leverage RegTech and Research to proactively stay ahead of the market, leverage FinTech to innovate and improve service delivery, upskill market intermediaries/Capital market operators, expand product offerings to increase captive market and continuously engender the market confidence through zero tolerance for infractions.
Speaking on the outlook in the post-COVID-era, Uwaleke said Joe Biden’s victory in the US presifential election and COVID vaccine prospects have positive implications for global capital markets.
“In Nigeria, the containment of COVID-19 and the unlikely possibility of another lockdown will further boost the market. Exchange rate unification will likely improve foreign investments and foreign exchange market liquidity,” he said.
Uwaleke added that the ongoing Nigerian Stock Exchange demutualisation would improve capital raising ability for infrastructure modernisation.
“The Finance Bill 2021 provision on unclaimed dividends (S.39) has the potential to address the issue and boost market confidence, the planned reopening of the borders will reduce inflation rate, while the planned introduction of financial derivatives in the capital market to mitigate volatility,” he said.
Corroborating him, the President, Institute of Capital Market Registrars (ICMR), Mr Seyi Owoturo, advised the Federal Government to chart new ways of moderating or balancing the effect of inflation on real returns of investments in the capital market.
Also speaking, the Vice President, Market Architecture, FMDQ Securities Exchange, Ms Jumoke Olaniyan, noted that government needs to do all it can to ensure the recovery of the economy by first quarter (Q1) of 2021 is feasible.
“What we have seen in recent times is that we have seen that the Nigerian economy can be very resilient and which is very critical or the foundation of any capital market.
“It is a situation whereby a capital market can be created to absorb the shock that it goes through and always recover quickly.
“Therefore, it is very good that there are indicators that we will recover in the first quarter of 2021 and that is testament to the resilience of the economy itself.
“This means we have a very strong foundation but we really need to put building blocks to make sure that we achieve that quick recovery and maintain that quick recovery in all facets of the economy”, Olaniyan said.