The Director General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, has said that Nigeria would need $3.9 trillion investment over the next 30 years to close infrastructure gap.
According to Gwarzo, who was represented Mr. Zakawanu Garuba, Executive Commissioner, Corporate Services & Supervising Executive Commissioner Operations, SEC, during the Nigeria Debt Capital Market 2015 Workshop, yesterday in Lagos, this massive sum cannot come from budgetary allocations but can be achieved through the debt market.
He said the Nigerian domestic debt market has witnessed remarkable growth and activity within the last few years, despite the increasing focus of investors on the money market. “Since the FMDQ began operations, we have seen a phenomenal increase in the liquidity of debt market instruments. We have moved from N7.1 trillion in annual trading volumes in 2012 to an average of N5 trillion in monthly volumes”, he stated.
The SEC boss said the Commission welcomes plans by the Federal government to launch a $25 billion emergency fund for investment in infrastructure, adding that SEC is confident that a substantial part of that fund should be raised from the domestic debt market.
Gwarzo noted that the revival of the corporate bond market has been quite slow and there are number of challenges to tackle in order to encourage companies to issue bonds. Key among these challenges is the current monetary policy. “We hope that soon, the right fiscal policies will be in place to drive down interest rates so that Nigerian businesses can assess affordable capital for investment, expansion and job creation. This should be a collective priority for all of us as the task of addressing Nigeria’s rising unemployment must be a goal for everyone”, he advised.
In her address, the Chairman, FMDQ OTC Securities Exchange (FMDQ), Mrs. Sarah Alade , pointed out that a vibrant and well-functioning Debt Capital Market (DCM) will address Nigeria infrastructure problem.
According to Alade, who also was represented by the Vice Chairman FMDQ, Mr. Jubril Aku, Nigeria is currently faced with a host of challenges, ranging from low credit transmission to inadequate infrastructure (power, housing and transportation) and low employment -with a host of others. “A lot of these challenges can be addressed by a vibrant and well-functioning DCM”, she said.
She lamented that the Nigerian DCM, unfortunately, is not adequate enough to address these issues and, as a result, is not functioning at its potential for the development of the nation’s economy.
She said, “This Workshop, thankfully, will serve to provide the platform for effective deliberations on the matters hindering and stifling the development of the Nigerian DCM, which will proffer practical and actionable solutions to these issues with the ideal project management to drive the reforms.”