Operators in the Nigerian capital market have called on the Federal Government to source funds from the local market to finance capital expenditure instead of relying on the yearly meager budgetary allocation budget.

The operators who spoke at the one day dialogue on “Capital Market & the 2015 Federal Budget” organised by Chartered Institute of Stockbrokers, CIS, Association of Stock broking Houses of Nigeria, ASHON, and Association of Issuing Houses of Nigeria, AIHN in Lagos criticized the present 2015 budget, saying that the N634 billion earmarked for capital expenditure was inappropriate as the country requires more infrastructure that would boost production and enhance the standard of living of the people.

The guest speaker at the occasion, Mr. Tola Mobolurin said “The budget of 2015 is a budget of austerity and not a transition budget. The major assumptions in the 2015 Federal budget, which include a GDP growth rate of 5.5 percent, benchmark oil price of $65 per barrel, daily oil production volume of 2.28 million barrels and average exchange rate of N165 per dollar are not realistic because revenue projections are not in tandem with the reality of the oil market from which the bulk of the revenue is derived. The instability in the market is such that market reality changes every week. It is a tough job.” The Chairman, ASHON, Mr. Emeka Madubuike, said “The critical role that the government must play in a country is to ensure that it provides adequate welfare for its citizens. Countries all over the world ensure that they harness the capital market and deploy the long term funds to the critical areas that would provide benefits to the people.”

To this extent, he called on the government to fund the critical areas with long term funds from the capital market rather than the budget.

Speaking as well, Chairman of AIHN, Mr. Victor Ogiemwonyi said “The budget is a critical component of economic management and must be taking very serious. The 2015 budget is not realistic considering the drop in oil price. Also, the present situation where recurrent expenditure is reduced by six percent is not enough while the capital expenditure is reduced by 30 per cent is not good for an economy yearning for major improvement in infrastructure.”

Continuing, he said “There is need to reduce Monetary Policy Rate, MPR , so that interest rate would get reduced . We therefore implore the Federal Government through the Central Bank of Nigeria , CBN to commence the reduction of interest rate by a downward review of the MPR, especially now that we have achieved a moderation in inflation to single digit in the last two years. .In his own comment, President of CIS, Mr. Albert Okumagba said “All over the world, the capital market drives the entire economy as it provides a platform for government at all tiers to access medium and long term fund to execute developmental projects. Also, there is need for increased savings and investment , hence we call on the Federal Government to promote the culture of national savings through appropriate incentives.

In his remark at the occasion, Acting Director General, Securities and Exchange Commission, SEC, Mr. Mounir Gwarzo sad “The Federal government has planned the 2015 budget in a manner that ensures the most vulnerable are protected while safely pursuing the ultimate goal of economic diversification.

I think beyond this year’s budget, the capital market must begin to assert itself as the most reliable medium for government to source for funds to finance critical infrastructure.