By Elizabeth Amihor

Inadequate capacity has been identified as a major factor militating against enforcement of regulation in the nation’s financial sector.

Former president of chartered Institute of Nigeria (CIBN), Mr,  Mazi Okechukwu Unegbu disclosed this  last week at the bi-monthly  Discourse of Finance Correspondents Association of Nigeria (FICAN).

“We should find a way of enforcing issues in the market. There are so many rules in our market that we are even confused but the question is who enforces these rules? Do we have the necessary capacity? Do we have adequate capacity to enforce the rule? I don’t think we have”, he said.

He said, “On regulation, we are neither over regulating nor under regulating. What we have is that we have adequate regulation but the problem we have is that who ensures that we enforce. The problem of it is enforcement. Enforcement is very lax. Enforcement of our rules and regulation is very lousy.

Unegbu called for measures to encourage local investors to participate in the capital market, saying that the current situation whereby foreigners account for 80 per cent of the market is not expedient

According to him, the market and the economy at large would be at risk of another meltdown if the only or major players are foreign investors.

Unegbu explained that “We should encourage local investors to come into the market because if we are strong internally, no external enemy can defeat us and if we make our investment climate very strong and we are making profit, people from outside who really want to invest and develop will come.

Our market is made up of 80 per cent foreign direct investment. We have this problem of having everything foreign. One thing about the foreigners is that they don’t bring the best into the country. The Nigerian market as we are seeing today has more retail investors than the big investors.

¡°Part of the problem we had, during the 2008 meltdown, was that those foreign investors dumped their shares, got any money they could and got out. Then the small retail investors now had a problem, the market too had a problem.

¡°We are not saying they should not come but we should develop our own market, make it strong and encourage the local investors. We are now encouraging foreign investors rather than encouraging the local investors.

Why not let us build our systems with what we have rather than wait for foreigners to build it for us. Most foreigners will come here to do what you and I can do, once anything happens, the foreign investors would scram. That is why am saying let us build our own solid institutions so foreigners can be attracted.” He explained.

Calling for cooperation between the money and capital market, he said there is need for complementary arrangement between regulators of the two markets so as to grow the economy of the country.

He noted that that “if the  banks are properly taking proper care in managing its lending that it will on the other hand strengthen the capital market in terms of giving funds.”