Some financial experts have offered some solutions to the economic crisis facing Nigeria as a result of the impact of the COVID-19 pandemic.
A financial economist and professor of Capital Market at the Nasarawa State University Keffi, Uche Uwaleke, has called on the Federal Government to partially privatise government assets such as the Nigerian National Petroleum Corporation through the Nigerian Stock Exchange.
Uwaleke, who stated this in a presentation he delivered at the Capital Market Correspondents Association of Nigeria 2020 workshop, advised the government to deploy proceeds to recapitalise development financial institutions such as the Bank of Industry and Bank of Agriculture.
He also advocated for partial privatisation of the Nigerian Commodity Exchange and policies to support the commodity trading ecosystem.
Uwaleke, who called for provision of fiscal incentives for companies listed on the securities exchanges, urged the Federal Government to pursue aggressive export-based diversification to reduce vulnerabilities to external shocks and boost external reserves.
He called on the government to address infrastructure gaps through public-private partnership, and issue more infrastructure bonds such as Sukuk and green bonds tied to self-liquidating projects.
While urging the government to tackle insecurity and continuously improve the ease of doing business, he called on the Central Bank of Nigeria to continue to deploy policies favourable to stock market growth and economic recovery.
“CBN should consider scaling up its development finance efforts, especially as they relate to the agric value chain,” he said.
Uwaleke called for the enforcement of corporate governance codes for listed companies to boost confidence.
He urged the companies to leverage RegTech and research to proactively stay ahead of the market, leverage FinTech to innovate and improve service delivery, upskill market intermediaries/capital market operators, expand product offerings to increase captive market and continuously engender market confidence through zero tolerance for infractions.
He said, “In Nigeria, the containment of COVID-19 and the unlikely possibility of another lockdown will further boost the market. Exchange rate unification will likely improve foreign investments and forex market liquidity. Ongoing Stock Exchange Demutualisation to improve capital raising ability for infrastructure modernisation.
“Finance Bill 2021 provision on unclaimed dividends (S.39) has potential to address the issue and boost market confidence, planned reopening of the borders will reduce inflation rate, planned introduction of financial Derivatives in the capital market to mitigate volatility.”
Corroborating him, the President, Institute of Capital Market Registrars, Owoturo Seyi, advised the Federal Government to chart new ways of moderating or balancing the effect of inflation on real returns of investments in the capital market.
Also speaking, the Vice President, Market Architecture, FMDQ Securities Exchange, Jumoke Olaniyan, noted that the government needed to do all it could to ensure the recovery of the economy by the first quarter of 2021.
She said, “What we have seen in recent times is that we have seen that the Nigerian economy can be very resilient and which is very critical or the foundation of any capital market.
“It is a situation whereby a capital market can be created to absorb the shock that it goes through and always recover quickly. Therefore, it is very good that there are indicators that we will recover in the first quarter of 2021 and that is testament to the resilience of the economy itself.
“This means we have a very strong foundation but we really need to put building blocks to effect to make sure that we achieve that quick recovery and maintain that quick recovery in all facets of the economy.”