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Capital market: Expert predicts capital flight to Angola’s stock market

By Michael Eboh
Experts in the Nigerian  financial industry are beginning to express concerns over plans by the authorities in Angola to set up an active stock market in that country, noting that the development spells doom for the capital market, as a number of foreign portfolio investors will divert their funds to Angola, when the market eventually becomes operational.

According to the experts, this development becomes worrisome, considering that fact that a number of business concerns in Nigeria, especially in the oil and gas sector, are already considering stopping further investments in Nigeria, shifting their investment destination to Angola.

Speaking at a forum announcing the forthcoming Fleishman Hillard Thought leadership Session, Mr. Jide Akintunde, economic expert and Publisher, Financial Nigeria, disclosed that the Nigerian capital market will lose a huge number of foreign funds to the Angola capital market, if the East African country goes ahead with plans to establish a stock market.

He noted that the West African capital market is not fully developed and positioned in the African continent, compared with stock exchanges in East, Central and South Africa.

He said, “The West African market is not doing well compared with its counterparts in East Africa and other sub-regional markets in the market. A recent survey and ratings of the International Monetary Fund (IMF), listed eight stock exchanges in Africa, as attractive investment destination. Out of these eight stock exchanges, only two were from West Africa, while East Africa has four stock exchanges mentioned.

It would have been five, if Angola had set up its own stock exchanges. However, it is on the verge of setting up its own stock market, this will adversely affect the Nigerian capital market, as a number of foreign investors would move their funds out of Nigeria to Angola, which experts say  have a lot of opportunities than Nigeria, in terms of depth.”

He harped on the need to integrate the stock markets in the West African region, so as to reposition them to take advantage of opportunities presented by the envisaged e-engineering in the global economic landscape.

He called for continuous dialogue on the ways to uplift the Nigerian capital market, adding that this is based on the immense benefits the banking reforms programmes had on the banking sector and the economy in general.

Speaking in the same vein, Mr. Bolaji Okusaga, Lead Consultant, The Quadrant Company, harped on the need to engage the Nigerian and West Africa business communities on issues militating against business growth and consolidation, such as policy legislation, infrastructures and corruption.

He said, “There is a dire need for multi-level actions to reinvigorate interest in investing in Africa at this critical point in time. We have seen reports from different financial institutions of the opportunities that exist in Africa. We need to harness these opportunities.”


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