The Nigerian Exchange Limited (NGX) has advocated the need for improved government incentives to encourage companies to list on the nation’s equities market.
The NGX’s Chief Executive Officer, Mr. Temi Popoola, who made the call during an interview with journalists, pointed out that exploring the opportunities in capital market through fiscal and other incentives would boost government’s revenue, reduce the nation’s poverty rate and by implication, the nation’s sustainable economic growth.
He said: “The reality is that because listed firms must adhere to regulatory requirements and corporate governance standards to maintain their listing on the Exchange, they are typically more consistent and reliable with their tax compliance. Consequently, the more companies we can get to list, the more revenue the government can make.”
On the NGX management’s topmost priorities in 2023, Popoola said the management would be focusing on tackling some lingering constraints to listing on new listings on the Exchange in order to deepen its capitalization through improved trading.
For instance, he recalled that the December 2022 approval granted by the Securities Exchange Commission (SEC) on NGX’s Technology Board rules which allow the NGX to list fintech start-ups and tech companies on the Exchange.
The NGX’s CEO clarified: “In order to push its digital transformation agenda, NGX had gone one step further and established an advisory panel on digital technology products. The Panel would give the Exchange a platform to communicate with the capital market community and the fintech ecosystem to enhance and increase NGX’s digital product offerings.
“We are interested in expanding beyond financial services, the construction industry and Telco. For instance, NGX admitted the first-Generation power company, Geregu Power Plc on the Exchange in 2022 and BUA foods which led to the deepening of the market and a fair representation of GDP.
“The agric industry is one sector that has been often said to be underrepresented on the Exchange. As we move to get such listings, we are also looking for companies and sectors with low representation in order to promote a market with equal representation”, he added.
Also, Popoola hinted that as part of the NGX management’s moves to diversify its activities, it would be exploring listings from free trade zone (FTZz) companies such as the listing of the second tranche of the Lagos Free Zone N25 billion series 2 bonds, the first 20-year corporate infrastructure bond in Nigeria on the Exchange.
He predicted: “Futuristically, we are looking at promoting financial literacy by exploring data dissemination through telco partnerships. We are also keen on aligning our activities to drive the UN SDGs and more importantly to promote the work we are doing in enabling a sustainable capital market ecosystem.”
