The Federal Government is setting up a N4.975 trillion ($25 billion) fund wholly dedicated to infrastructure investment. The Minister of Finance, Mrs. Kemi Adeosun, who stated this at the inauguration of the Capital Market Master Plan Implementation Council (CAMMIC) in Lagos yesterday, said the plan was due to the significant revenue squeeze and other budgetary constraints.
She said the investments would clearly not come from government coffers alone, stressing that the capital market could really make itself relevant by stepping in to close the funding gap.
Adeosun, who was represented by the Permanent Secretary, Ministry of Finance, Dr. Mahmoud Isa-Dutse, noted that going through the master plan, it was heart-warming to note that this is “the type of capital market you envision for our country and, indeed, we desperately need such a market to emerge in order to tackle Nigeria’s biggest challenges of huge infrastructure deficit and unacceptable level of unemployment.
“As you all know, to grow our economy, we require significant funds to modernise our critical infrastructure.” She described efficient and vibrant capital markets as an indispensable feature of any modern economy, supplying affordable medium-to-long term capital needed for growth.
According to her, they facilitate mobilisation of savings, accelerate capital formation, provide investment avenues and enhance efficient allocation of capital to growth sectors. She said Nigeria needed and deserved a capital market characterised by high level of liquidity, depth, breadth and sophistication to enable rapid socioeconomic development. She expressed worry that less than three per cent of Nigerians currently invest in the capital market and even more worrisome, only 0.2 per cent of Nigerians invest in mutual funds.
“Imagine the kind of savings to be mobilised, the liquidity to be injected and the sophistication to be developed if we improve these numbers by bringing millions more Nigerians to invest in the capital market.
For Nigerians of faith and people who prefer ethical investments, we must deepen the non-interest product space so they can be involved in wealth creation opportunities the capital market offers.
“For a country and economy of our size, there is no reason why we should not be able to actualise the targets and aspirations we have set for ourselves within the Master Plan. Indeed, with diligent implementation, we shall emerge as Africa’s most modern, efficient and internationally competitive capital market that catalyses Nigeria’s emergence as a top 20 global economy. “With a detailed master plan, we get to reap the benefits of strategic thinking, policy consistency, greater coordination, and hopefully better results.
As we inaugurate the Council that will lead advocacy for the Capital Market Master Plan, I urge everyone here to see this as the important national assignment it represents, “she said. She assured that as the minister in charge of supervising the capital market, she would support the Securities and Exchange Commission (SEC) to ensure that this project is successful.
Speaking earlier, the Director General of SEC, Mounir Gwarzo, said that SEC’s enabling law, Investments and Securities Act (ISA) 2007, in foresight, required it to set up a national investor compensation scheme.
Specifically, Section 13(k) of the Investment and Securities Act 2007, enjoins the Commission to act in the public interest having regard to the protection of investors and the maintenance of fair and orderly markets, and to this end, establish a nationwide trust scheme to compensate investors whose losses are not covered under the Investors Protection Funds administered by Securities Exchanges and Capital Trade Points.”
Gwarzo said that the 10-year Nigerian capital market Master Plan, which has become SEC’s guiding document, considered the investor protection fund as a critical ingredient for restoring and sustaining investor confidence. He recommends the urgent establishment of the fund.