Chief Executive Officer of the Nigerian Stock Exchange (NSE) Oscar Onyema has challenged Africa governments to ensure development and sustainability of Capital Market Operations as it is a viable option to attract investment for economic development.
Onyema in his opening remark at the opening of the second Lagos and London Capital Markets in Partnership Conference said the event is coming at an interesting and pivotal time in the history of Nigeria, Economy and the Global Financial Markets.
He recalled that the first quarter of 2016 witnessed a wild ride for most economies and markets; – in some ways a tale of two halves.
According to him, Asset prices collapsed in the first part of the quarter, but as oil turned the tide in February, some recovery followed.
However, the second quarter beckons to be no less volatile – as oil prices have begun a retreat, geo-political tensions remain, and central bankers find themselves still walking a fine wire, he observed.
“In Nigeria, we all know too well the intricacies facing the Economy and Markets. With increases at a pace not familiar to recent memory, inflation is back in the double digits. Rigidity in the FX markets continue to be a challenge. Yet, Nigeria remains top of mind on the African continent for investors”, Onyema noted
He said the theme of the conference – “Leveraging Cross-Border Capital Markets for Sustainable Growth” – is quite topical for the Country at this time, adding that as government grapples with the task of articulating a clear economic blue print for the short to midterm within which credible fiscal and monetary policies can emerge, and diversifying the economy in the face of depressed earnings from legacy sources, the reality of the need to leverage and embrace the globalisation of economies and financial markets becomes clearer.
He said, “Capital Markets are critical to sustainability of growth and development in an Economy.
It is my strong belief that one of the things that Nigeria (and Africa) needs to sustain its growth, is a solid and vibrant capital market ecosystem that will attract investment and unlock the potential that exists in the economy”.
Speaking further he pointed out that Capital markets increase the proportion of long-term savings that is channelled to long-term investments.
“Based on current outlook for Economies and Markets of the G7 countries, only the economies of the United States and United Kingdom appear on track to have sustainably exited the global financial crisis of 2008.
Why are The UK and The US ahead? One of the key differentiating factors these two markets have in common, relative to the others, is a strong and resilient capital market/financial system” he said.
The NSE CEO also recalled that the development of capital markets in London was catalysed by “Big Bang” in 1986, which ended the fixed-rate equity commission system and spurred the entry of large- scale US investment banks into the London market.
“Big Bang” reinvigorated the UK equity market and facilitated the further growth of London as a global financial center.
He said a similar catalytic event must take place in Nigeria; to position the country’s capital market as the sustainable financial center in West Africa, and for Africa.
“Our collaboration with the London Stock Exchange is deliberate and strategic. It is geared at encouraging seamless cross-border access between our Capital Markets to ultimately drive deeper capital markets that enable capital formation for Businesses and Governments; create larger liquidity pools and greater competitiveness for our
investors; and enhance capacity and promote diversity of investment products to meet the needs of a wide range of investors and issuers.
The opportunity is here, and the opportunity is now. Creating and sustaining the growth trajectory of our exchanges, capital markets, financial markets, economies and the continent as a whole, requires a strong commitment from each and every one of us here today. It is not an easy journey, but it is one we have no choice but to embark upon, individually and collectively, in order to guarantee our competitive advantage in today’s interconnected world.
The world is getting flatter every day, and with soaring world populations, we must facilitate the drive for wealth creation for our own people, while providing the platform to which global savings can be channelled. We must use this opportunity to partner with each other, to enable us further unlock our growth potential, and advance the development of our financial and capital markets” he said.