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Capital market stakeholders advocate increase contributions to nation’s economy

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By Ifeyinwa Ezeokoli 

Capital market stakeholders have expressed dissatisfaction over the 10 percent contribution of the Nigerian capital market to the Gross Domestic Product (GDP) just as they listed ways to boost ways of improving the sub-sector.

The stakeholders spoke at the 11th Annual Conference Investiture of Fellows, Induction of Associates & Annual General Meeting of the Institute of Capital Market Registrars (ICMR) in Lagos.

The ICMR conference was themed: “Sustainability of the Nigerian Capital Market as a catalyst for Economic Growth and Prosperity.”

They described the 10 percent contribution of the capital market to the nation’s economy as relatively low.

Senior Partner at Biodun Adedipe & Co, Abiodun Adedipe, said the common assumption that the stock market and economy moved in concert had weakened in recent times.

Adedipe observed that critical sectors that largely contributed between 70 percent and 85 percent to the Nigerian GDP were not yet incorporated in the Nigerian capital market.

“In fact, movements in the market and the economy are no longer synchronized because they do that for just a while and thereafter they diverge.

“I found a very weak correlation between the movement growth of the major metrics in our stock market with the growth of our GDP, very weak and negative co-variance.

“The market capitalisation is less than 10 percent of the GDP. In some jurisdictions, you see it up to two 250 percent and 300 percent.

“Some of the major sectors that contribute the most to GDP are not well represented in this capital market. I found six sectors in our economy and they include agriculture, trade, ICT and then manufacturing.

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“Then, we will take mining, quarrying, and real estate. If you check your data, those six sectors contribute between 77 percent and  82 percent of Nigerian GDP,” Adedipe said.

Also speaking, the Chairman of Chams Plc,  Ademola Aladekomo, said there was a mismatch between the claim of 50 million investors in the nation’s capital market and the performance of the market itself.

Aladekomo called on market regulators and operators to find strategies to bring tech companies that would entice the millennials into investing in the Nigerian capital market.

He stressed the need for enhanced sensitization programmes for people who understand the rudiments of the Nigerian capital market to boost participation.

Speaking on the topic: “Role of Digital Technology in the Nigerian Capital Market, the Chief Executive Officer of the Nigeran Exchange Limited (NGX), Temi Popoola, said the country and the globe had made huge progress in digitalisation.

“When we talk about digitalisation, for example, it’s important to realise that we made a lot of progress, both globally and also in Nigeria.

“It’s over 25 years now that the capital market globally has been paying attention to technology.

“Once COVID kicked in for almost three years, there was no single physical trading on the floor of the Nigerian Stock Exchange in our country.

“They were all digital, no human sort of real physical contact, and there was not a single day of downtime,” Popoola said.

Earlier, Oluseyi Owoturo, ICMR President & Chairman of Council, said that a major point currently in the capital market is the proper identification of existing investors to prevent identity theft.

Owoturo said that there may be a need for a provision of national identification for all financial transactions.

Also, the Director General of the Securities and Exchange Commission  (SEC), Lamido Yuguda,  commended the ICMR for its contributions to the growth and development of the Nigerian capital market.

Yuguda represented by Dayo Obisan, Executive Commissioner Operations, SEC, said that the commission would continue to collaborate with the ICMR to take the market to the next level.

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