By Moses Nosike
Chairman, BGL Group and former minister of FinancÃ©, Dr. Kalu Idika Kalu in a public lecture pointed out the way forward for economic growth and development as well as capital market development.
In a lecture delivered in Lagos, Kalu advised government to invest essentially in infrastructure to ensure growth in Nigerian economy now that global meltdown is hitting many economies ofÂ the world.
He howeverÂ advised leaders ofÂ the Nigerian Capital Market to work in sync, collaborate andÂ reconcile their regulatory operations.
Kalu said, â€œinfrastructure is a generic term for basic structures that are essential to the generation of economic growth and development in modern economies. Infrastructural spendingÂ is very critical to getting the economy working and reviving the capital market. Funds invested in infrastructure and its proceeds trickle down to the capital market. There are four basic infrastructure areas that Nigeria must invest an estimated annual accrual of $100b to get the economy functioning again. This is why the idea of Nigeria paying out $12b recently remains odd for a capital deficient economy. The infrastructures are power, railways, roads and the oil and gas industries. These infrastructure and related investments are critical to achieving high growth rate of GDP; governmentâ€™s set vision for Nigeria,â€ he said.
Continuing he said, â€œ the leadership of the Nigerian Capital Market, that is the SEC and the NSE must reconcile their regulatory operations and work together as a team saddled with critical oversight functions for one of the largest capital markets in Africa. The first thing to be done is a critical self-examination of the current structures, policies, procedures, and operations of the Market. The two regulatory authorities must ask serious questions and work with experts in various aspects of their duties to implement salutary solutions.â€
Kalu however, advocates for Market transparency, saying, Stock Exchanges all over the world consider that the conduct of a fair and orderly market requires every listed company to make available to the public information necessary for informed investment decisions and to take reasonable steps to ensure that all who invest in its securities enjoy equal access to such information. In this line, the NSE is expected to continue its pursuit of world best practices and transparency in both medium and long term as follows: immediate public disclosure of material information; thorough public dissemination of capital market information; response to unusual market actions which may affect financial flows has to be immediate among others,â€ he said, adding that the real or productive sectors (Agriculture and Manufacturing) of the economy must be developed with genuine and sustainable policies that will ensure real growth to yield both income and adequate employment opportunities. â€œWhen the productive sector enjoys real growth, where companies will opt to come for Stock Exchange listing and ultimately have access to longer term funds for further profitable productive investment which will have the multiplier effects of increasing the nationâ€™s wealth, reducing unemployment, increasing foreign exchange reserves and ultimately enhancing substantial value for shareholders.â€
He emphasised also the need to embark on adequate investor education/enlightenment, as well as behavioural change communication strategies which will be aimed at convincing investors to opt for the long haul and look at the bigger picture. â€œThis is necessarily a slow process that touches all sections of the educational and business communities in the country,â€ he concluded.