To boost capital market participation in the country and increase revenue, former president of the Chartered Institute of Stockbrokers and managing director/chief executive of Arthur Steven Asset Management Limited, Mr Olatunde Amolegbe, has called on the federal government to encourage listing on the Nigerian market.
Particularly, he highlighted companies in which the government has direct or indirect holding as well as companies that do business with government. This, he said, not only boosts the capital market in the country but would engender transparency and boost tax revenue in the country.
Speaking at the 2023 market review and 2024 projection of the Capital Market Correspondents Association of Nigeria (CAMCAN) in Lagos yesterday, Amolegbe said, as against over 50 per cent market capitalisation to Gross Domestic Product as seen in many countries, Nigeria’s market capitalisation to GDP stands at 13 per cent.
This, he said, is an indication that majority of the big companies in the country are not participating in the Nigerian capital market.
Noting that the capital market ensures transparency for companies listed, Amolegbe said, increased listing on the capital market would see more tax revenue for the government.
“I believe government needs to consider urging companies particularly those they have direct holding in and those that have huge business with government to list on the market. A lot of businesses are not listed on the exchange and they do business a lot with government The more transparent the listing, the more tax revenue,” he pointed out.
Expressing optimism on the listing of Dangote Refinery as well as NNPC Limited, he said, it would boost the capitalisation of the Nigerian capital market.
He also charged the government on the rising spate of insecurity in the country saying until it is addressed, inflation would continue to soar and investor will remain wary of investing in the country.
“Insecurity is a major issue and govt needs to work on it as it is disrupting supply chain this contributing to the increase in inflation rate. Farmers are not unable to produce and the ones that can produce can’t get to market,” he stressed.
Also, he said, as long as the environment is seen as unstable, investors, both local and foreign will continue to be wary of investing, leading to a further decline in foreign exchange inflow. He noted that foreign exchange will be a significant contributor to where the capital market will be by year end, saying, “If liquidity improves and price stables then organizations can better plan. If not, 2024 might be a dicey year for a lot of quoted companies.”
