Nigeria-Uk Capital Markets Project Launches Report
Nigeria-UK capital markets project launched inaugural report on the state of the capital markets yesterday with detailed recommendation for the legal and regulatory environment and aim to deepen the market capital and attract domestic and international investments, CNBC Africa’s Didi Akinyelure caught up with Aigboje Aig-Imoukhuede,
President of Nigeria Stock Exchange. AIG-IMOUKHUEDE: The report focuses on four main things, in no order of priority: capacity building, market regulation, market development and boosting capital flows.
On the issue of capacity it’s simply about sharing experiences in such a way that domestic operators and regulators can benefit and learn from the UK markets.
AKINYELURE: How will this impact on the further development of our capital markets and boost capital in-flows between UK and Nigeria? AIG-IMOUKHUEDE: One of the big learnings in UK has been that market development in terms of volumes, number of listenings and so on follows collaboration and integration.
The more collaborative the stakeholders in the capital markets are and the more integrated the markets are, we get the type of traction that leads to development. In Nigeria we have operated in silos and we have learnt from the UK.
In that regard I think there are some very important developments for example, a single umbrella under which all financial services professionals in Nigeria can operate in unison. AKINYELURE: What are some of the incentives for investing in these region and what are the barriers? AIG-IMOUKHUEDE: Markets are about cost and benefits and lots of time the benefits allow participants in the markets overcome their challenges around cost.
There can be incentives that are physical in nature whether in terms of taxation; there are incentives that could be infrastructural in nature. We need to sit down and talk to the federal and state governments and the regulators and come out with a set of incentives that makes the Nigeria markets competitive and comparable to other markets around the world.
AKINYELURE: Investor protection is a barrier to increase capital influence, are there a bilateral investor protection treaties in place? AIG-IMOUKHUEDE: We do have treaties but I think the investor in the Nigeria markets is more concerned about two things when you look at investor protection: first security, I don’t know how strong the bilateral agreement would be if the investors think that dealing in Nigeria puts you at personal risk for example.
Second is enforcement of contracts and dispute resolution, as life is you have disputes, you can resolve disputes within a reasonable space of time, so these are the types of protection I like us to focus on and the response of his excellency, the Governor of Lagos State he focused on dispute resolution and also the judiciary working with capital markets operators fast track the resolution of financial market related issues.
AKINYELURE: What’s next for the Emerging markets tax force? AIG-IMOUKHUEDE: The way we work is this, we look at a set of issues pertaining to the market and you see that the report is authored by lawyers, basically being the work of the larger markets but mainly solicitors in the UK and solicitors in Nigeria.
After we come up with a white paper, which is being launched today, we have recommendation in that white paper and after the next three months we will advocate strongly to all stakeholders including ourselves around what action steps we must take. The report contains recommendation, action steps, people responsible and dates.
The test is how strongly can we advocate and get people to respond and do what they must. In another four months, another report will be generated and we will be focusing in areas of market development.
In that type of report we will be looking at privatisation, how do we do it, how do we agree as a nation to bring LNG to the market. We will see a series of cerebral output and practical steps to make those outputs come to reality over the next few years.
What is important is sustainability and the best way of sustaining this effort is to create the equivalent of the city UK. AKINYELURE: Talk a little bit about the Nigerian delivery group? AIG-IMOUKHUEDE: The Nigerian delivery group is the group of professionals in Nigeria- Lawyers, accountants, issuing houses, investment bankers, brokers, dealers and every other person involved in the capital market who are invited as co-chair along with Sir Roger of the Nigeria- UK emerging capital markets initiative to do the thinking and advocating and this would likely be the nucleus that leads to Nigeria’s equivalent of the city UK.
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