By MICHAEL EBOH
Stockbrokers have called on the federal government to provide a stimulus package worth about N500 billion for the Nigerian capital market if it is serious about reviving the fortunes of the market.
Speaking in an interview with a television station in Lagos, the immediate past president of the Chartered Institute of Stockbrokers, CIS, Mr. Mike Itegboje, said the forbearance package considered by the government will not be enough to stimulate the market.
According to him, the stimulus package will not involve taxpayers’ money, it would only require the federal government to guarantee the amount or raise the funds in form of bonds.
He said, “The stimulus package does not involve tax payers’ money, what is required is for the government to borrow the money with a guarantee. They are people who are willing to put money.
Itegboje queried why the rationale behind the federal government’s delay in putting forward a stimulus package for the capital market, especially when it provided bail out package for the aviation, entertainment and textile industries.
“If the federal government provided huge funds as bail out for other sectors considered as critical to economic development, what is wrong with it pumping money to bail out the capital market?” he asked
He assured that if the stimulus package is put in place, the government will recover the funds with a profit.
He said, “I bet you the government will recover the money with a profit down the line. All it needs is to issue bonds of up to 10 years. It would take like five years to begin recouping the money. The risk of floating and investing in the bond is a worthy risk to revive the market, the economy, to transform the country and to bring ailing businesses back to life.
“Nigeria can afford to take that risk, in the interest of the economy and the stock market. No country ever allows the stock market to go under. This is seen in what is happening all over the world, where European countries are providing bail out stimulus packages for a whole country, like Greece. “The government doesn’t need taxpayers’ money; instead, it would make money for the taxpayers.”
Finance Minister, Ngozi Okonjo-Iweala had stated that the Federal Government will release a forbearance package to stockbrokers as part of measures to stimulate confidence in the Nigerian capital market and increase liquidity.
She had said, then, “We are working on the forbearance; we have now agreed on it, and that we are going to implement it. We are having discussions about how to do it.
“We must remember that we don’t want any moral hazard, we don’t want those stockbrokers who did the right thing to think that they are not appreciated or that they have been neglected. So we must honour them too by looking at the type of forbearance to be accorded to the stockbrokers who are having difficulty.