The Securities and Exchange Commission (SEC) has confirmed that the implementation of its 10-Year Capital Market Master Plan (2015-2025) is gaining traction and expressed appreciation to all stakeholders that have supported its sustained drive to grow the nation’s capital market.
Amongst the key objectives of the Plan, which was flagged off about six years ago, include full dematerialization of Share Certificates, recapitalization of Capital Market Operators, launch of National Investor Protection Fund, introduction of new Corporate Governance Scorecard for public companies, and Electronic Dividend Mandate Management System, amongst others.
The Director General of the Commission, Lamido Yuguda, recounted some of the achievements recorded so far on the Plan during the virtual signing of a $400,000 grant agreement between the commission’s management and the African Development Bank (AfDB) team to strengthen Nigeria’s securities market regulation and broaden market instruments.
The grant will support the implementation of SEC Nigeria’s Plan and its vision to position Nigeria’s capital market as a competitive and attractive destination for portfolio investments.
By the terms of the agreement, the grant which will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the Bank, and be committed towards strengthening the risk-based supervision framework, regulation of derivatives and green bonds, and build capacity for green finance.
The SEC Boss recalled: “The SEC designed a targeted training program to address identified gaps in regulation and market development to enhance the Commission’s readiness to effectively regulate new products and promote the growth of the capital market. Some of the initiatives identified include procurement of a surveillance solution, capacity building in the areas of Risk based supervision, Green Finance and Derivatives.
“Realizing these focus areas align closely to AfDB’s “High 5s” priority sectors for the economic transformation of Africa, we leveraged our strong partnership with AfDB to drive some these key initiatives to strengthen internal and issuer capacity.
“We are very pleased and thankful to AfDB for providing grant support to execute these very important projects. We believe that your support and our collaboration underscore the Commission’s and the Bank’s mutual goal to grow the capital market and create viable avenues for sustainable economic growth for Nigeria and the region”, the investment expert added.
Yuguda restated the commission’s commitment to observe the terms of this agreement and successful implementation of the critical projects and initiatives.
In his remarks, Mr. Lamin Barrow, Senior Director AfDB Nigeria Country Department, explained that the $400,000 grant was to support Nigeria’s Risk Based Supervision Framework implementation and capacity building project, adding that the signing event represents milestone in the bank’s partnership with the Nigerian government in its efforts to grow the nation’s capital market.
He clarified: “It is informed by our shared vision that when effectively function and equip the capital market are critical for promoting optimal capital allocation to finance products in other sectors of the economy, infrastructure development and other key economic activities.
“The grant for the capital market development trust fund is a multi-dollar trust fund administered by the AfDB and dedicated to the development of African capital markets through technical assistance to support current initiatives, to strengthen the financial markets supervisory and regulatory framework and to make the markets instruments that will support deepening of the markets in Nigeria.
“We enhance the capacity of the SEC in risk based supervision framework for the financial and securities market, strengthen operational readiness in the area of risk based supervision, derivatives and provide capacity and training programmes for the Nigerian Stock Exchange, issuers and institutional investors in Green Bonds as well as market operators and regulators from the wider ECOWAS region”, Barrow added
The AfDB Director further explained that the bank’s support was inspired by Nigeria’s strive to enhance the role of capital market in mobilisation of resources for Nigeria’s fast growing institutional investor base, the private sector and international capital to finance private and sovereign investment programmes.
According to him, the intervention is borne by lessons from experience that shows that countries with developed capital markets have posted stronger economic growth and structural transformation and that is why the AfDB Group is supporting the emergence of well-functioning and resilient financial and capital markets in African countries through various mechanisms.
He commended the SEC board and management on the implementation of the 10-year capital market master plan that is aimed at positioning the country as a competitive and advanced destination for investments, assuring that the AfDB is committed to working with the Commission on the project and other initiatives to enhance the base of Africa’s capital markets.