News
SEC Reaffirms Commitment to Deepen Capital Market
Securities and Exchange Commission (SEC) in its moves to deepen the Nigerian Capital Market and bolster liquidity has reaffirmed its commitment to its 10-year master plan which began in 2014.
Ms Mary Uduk, the Acting Director-General, SEC, who made this known on Thursday at the SEC Journalists Academy in Uyo, explained that the Nigerian Capital Market Master Plan (2015-2025) by the Commission in collaboration with other stakeholders was to improve key areas especially investor protection and education, professionalism, product innovation, and for the expansion of the capital market’s role in Nigeria’s economy.
According to her, “It is our resolve to remain committed to developing our capital market in line with the 10-Year Master Plan.”
“In March 2008, market capitalization reached a then all-time high of N12.6 trillion. Specifically, in 2005/2007, recapitalizing banks and insurance companies raised over $10 billion from the capital market.
“However, the All-Share Index (ASI) dropped by 52.6% by December 31, 2008 from the high in early 2008 while average daily trading volume also dropped by about 77% of high levels.
“The Nigerian stock market between March 5 and December 31 2008 therefore lost about N5.7 trillion, or 45.1% in value,” she said.
This she explained was due largely to dominance and concentration of the market by the banking sector which constituted 60% of the market then.
According to the SEC boss, “15 out of 20 most capitalized companies were banks.
“Risk management and corporate governance was not developed enough to support the fast growth thereby leading to inappropriate market behavior and abuse of margin lending.
“One of the resultant effects of the downturn was loss of confidence in the market by investors and since then they have not fully returned to the market.
“Meanwhile, from 2008 to date, the Commission had focused on leading the market to recovery.”
Dematerialization, e-dividend, and Direct Cash Settlement were some of the sundry initiatives by the Commission to ensure that the market not only recovers, but thrives to become Africa’s most efficient Capital Market.
“The recapitalization of capital market operators was aimed at improving the baseline infrastructure of the CMOs, improves their market access and service delivery as well as enable them comply fully with the New Minimum Operating standard set by the Commission.
“These were aimed at helping the market develop robust controls; strong governance framework and effective human capital.
“As at December 30, 2016 which was the deadline given to all CMOs to recapitalize, 384 out of 449 CMOs had fully complied. More of them have done so afterwards.
“Similarly, the National Investor Protection Fund (NIPF) was established to compensate investors for pecuniary losses, boost their confidence and encourage the domestic retail investors back to the market,” she said.
EFCC
The African Development Bank Group last week approved an investment of €6.5 million in the Saviu II fund in order to support technology start-ups through their seed phase and first institutional fundraising, mainly in French-speaking Central and West Africa.
The Bank will invest €4.5 million as equity and €2 million as a first-loss hedging tranche on behalf of the European Commission, under the Boost Africa Programme.
This participation of the Bank Group will enable the Saviu II fund to give priority to companies with a strong technological or digital component.
Saviu II, the second investment vehicle of Saviu Partners, plans to invest between €500,000 and €3 million in about 20 technology or technology-oriented business-to-business start-ups in the seed phase or carrying out first institutional fundraising.
The Saviu II venture capital fund aims to make at least 60% of its commitments in the French-speaking countries of West and Central Africa: Côte d ‘Ivoire, Cameroon, Benin, Senegal, Togo, Burkina Faso and Mali.
The fund can also co-invest in promising technology companies in East Africa that have a strong team and business model, and whose strategy includes entering the market in French-speaking West African countries and establishing a strong presence there.
In addition, the fund will devote a dedicated envelope to pre-seed investments, focusing on minority equity investments, usually in co-investment with studios, incubators or other ecosystem partners.
Nigerian Government has signed a $1.3 billion Memorandum of Understanding (MoU) with Africa Finance Corporation (AFC) via the Solid Minerals Development Fund (SMDF) to fund an alumina refinery, national geoscience mapping, and a strategic investment vehicle for mining growth.
Special Assistant to the Minister of Solid Minerals Development, Segun Tomori, said the refinery will process one million tonnes of bauxite yearly using a modern Bayer process, powered by an on-site gas-fired cogeneration plant.
Minister Dele Alake called it a transformative milestone boosting GDP, aligning with reforms that improve investment climate, regulations, and licensing to attract private capital. He directed agencies to fast-track permits.
The 20-year project at 95% utilization eyes 19 million tonnes total output, $1.2 billion annual GDP addition, $25 billion economic impact, and $8 billion forex earnings, per feasibility studies.
SMDF Executive Secretary Fatima Shinkafi termed it the agency’s biggest funding deal, supporting value-addition policy.
The partnership extends to geoscience mapping for mineral data, de-risking exploration, and a joint vehicle for mining assets.
Permanent Secretary Engr. Farouk Yabo praised the reforms. Shinkafi signed for government; AFC’s Franklin Edochie for the corporation, witnessed by AFC CEO Samaila Zubairu.
Tomori positioned it as Nigeria’s largest private mining investment and FDI magnet.
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