Capital market can act as financing tool for PPP projects –Yuguda

The Director-General, Securities and Exchange Commission (SEC) has stated that the Nigerian Capital Market has the capacity and is well positioned to finance Public-Private Partnership (PPP) infrastructure projects in the country. Yuguda made this remark at the 2023 Chartered Institute of Stockbrokers (CIS) National Workshop which was held in Abuja on Thursday. Speaking on the theme; leveraging the capital market to drive public-private partnership for effective national economic growth, Yuguda, citing a World Bank report, pointed out that Nigeria’s current level of public spending on infrastructure is one of the lowest globally and added that this lack of investment has resulted in a significant infrastructure gap, which has adversely affected the quality of infrastructure and limited access to essential services. The SEC DG who was represented by the Executive Commissioner, Corporate Services, Ibrahim Boyi, highlighted that given the current rate of capital expenditure, it would take approximately 300 years to bridge Nigeria’s infrastructure gap. He stressed the need for a new approach to financing infrastructure development in Nigeria to stimulate economic growth and argued that leveraging public-private partnerships is essential, and the capital market can play a crucial role in this regard. The Director-General explained that the capital market, with its patient capital and established project financing options, is well-suited to finance PPP infrastructure projects at various levels. He cited the common model used in many developed countries, where governments and private sector partners raise debt capital for PPP projects through bonds and loans. His words, “This is an infrastructure financing model that is a common choice in many developed nations of the world. Capital markets allow governments and private sector partners to raise debt capital for PPP projects. Governments can issue bonds to finance their share of the project costs while private companies can secure loans or issue corporate bonds for their contributions. The capital market’s ability to provide funding, risk management tools, liquidity, and efficient allocation of resources make it a crucial partner in the success of PPP projects. It allows governments and private sector partners to leverage their strengths and resources to deliver essential public infrastructure and services”. He thereafter commended the CIS for its role in developing the economy by equipping individuals and organizations with the necessary skills and expertise in the financial sector, which is crucial for the success of PPP projects.

Unclaimed dividends in capital market hits N190bn —SEC

The Securities and Exchange Commission (SEC) says that the unclaimed dividends figure in the nation’s capital market currently stands at N190 billion. Mr Lamido Yuguda, the Director-General of SEC, said this at the second post Capital Market Committee (CMC) media briefing in Abuja on Friday. He said the figure increased due to issues concerning identity management in the country. Yuguda also attributed the rising figure to multiple subscriptions by investors during banking consolidation and identity management. According to him, “we have legacy issues that have aggravated unclaimed dividends.” Yuguda, however, said the commission was working with the Nigeria Inter-Bank Settlement System (NIBSS), on the e-dividend portal. He added that the SEC was working with NIBSS to make changes to the electronic dividend portal currently going through some form of upgrading and repair. “We are working very hard to ensure we reduce the number of unclaimed dividends. “This is why we are upgrading the e-dividend portal with NIBSS to restore investors’ dividend and reduce unclaimed dividends. “We reiterate that every person, who has come to the capital market and invested money, should be able to get his dividends as and when due,” he said. On dollar denominated bonds listed on NGX, the director-general said it was not a problem as long as it was a corporate one. He said that the road ahead of the market was undeniably challenging but that the capital market would step forward in whatever way to lend its helping hand to the current economic reforms. “We introduced the Know Your Customer (KYC) requirement so that all information needed will be collated. “The market must make sacrifices to help drive the economic transformation that will change our nation’s fortunes for the better. “The Chairman informed the meeting that the Investments and Securities Bill (ISB) 2023 was under consideration by the 10th National Assembly. “The Bill aims to align regulations with the modern dynamics of the market and it is hoped that if passed into law, it will enable optimal contribution of the capital market to national development,” he said. The director-general said that market players were urged during the meeting to prioritise cyber-security measures to safeguard sensitive financial data and transactions. He lamented the trend where companies chose to de-list from the capital market. Also speaking, the Commissioner, Operations at SEC, Mr Dayo Obisan, said one of the major issues bedeviling the commission was for beneficiaries to get access to claim their dividends. “We keep putting our efforts to ensure that investors update their bank details, information and claim their dividends. “But we still have some of them who fill in details wrongly. “We at SEC are working very hard and we want to ensure bonuses get transferred to beneficiaries, capture everyone who is in the market so that our data is more robust. “We can be able to work effectively on reducing unclaimed dividends,” Obisan said.

Uwaleke appointed SA to Senate C’ttee Chair on Capital Market

The first Professor of the Capital Market in Nigeria, Uche Uwaleke has been appointed as Special Adviser to the Chairman of the Senate Committee on Capital Market. A letter signed by Chairman of the committee Senator Osita Izunaso, and titled: “Appointment as Special Adviser to the Chairman Senate Committee on Capital Market, and seen by the NIGERIAN ANCHOR on Thursday morning, read: “It is my pleasure to offer you appointment as Special adviser to the Chairman of Senate Committee on Capital Market and Institutions. “Having followed with keen interest your display of deep knowledge of the capital market through numerous media engagement and academic publications some of which I have come across. “As Chairman of the Senate Committee on Capital Market and Institutions, I have no doubt that your advice will assist me and members of my committee to exercise adequate oversight on the Nigerian Capital Market.” A Professor of Finance and the Capital Market at the Nasarawa State University and President of Association of Market Academics of Nigeria (ACMAN), Uwaleke has vast years of experience in the finance and the capital market. A former commissioner of finance in Imo and one-time chief economist at the Securities and Exchange Commission (SEC), analysts are confident that he would bring his experience to bear in the Nigerian capital market. 

DMO lists N130bn Sukuk to boost capital market

The Debt Management Office (DMO) of the Presidency has announced the listing of N130 billion sovereign Sukuk on the Nigerian Exchange and FMDQ starting on August 8, 2023.This was disclosed in a statement from the Debt Management Office (DMO). The Federal Government has been able to fix 75 roads since the FGN Sukuk initiative started. Some of the roads include Ibadan-Ilorin Road, Kaduna Eastern Bypass, and Loko Oweto Bridge over the River Benue among others.  The listing follows the successful oversubscription of the N100 billion opened in November 2022. This current listing is geared towards accommodating the needs of investors towards the facility.  According to the statement, “The sovereign Sukuk was opened for subscription in November 2022, with an initial of N100 billion however, it garnered immense interest from investors with a remarkable subscription level of N165.25 billion which represents over 165% of the amount offered. To accommodate the need of diverse investors who subscribed to the Sukuk, N130 billion was allocated.  Sukuk bonds are investment certificates representing ownership of the holder in an asset. Since 2017 when the Federal government began issuing sovereign Sukuk, the DMO has raised about N742.55 billion whose proceeds have been used for road construction and other infrastructure projects across the country.  The last DMO issued Sukuk in 2017 had an interest return of 16.47% with a tenor of 7 years. It was used in the construction of roads across the six geopolitical zones of Nigeria.  According to the DMO release, “the listing of the N130 billion sovereign Sukuk on the NGX and FMDQ securities exchange will expand the range of financial offerings available to investors in the capital markets.  “The opportunity to buy and sell the sovereign Sukuk will provide liquidity to investors and promote price discovery,” it noted.