Economy
Amosun Tasks SEC to Explore Areas to Improve Government Revenue
By Aduragbemi Omiyale
The Chairman of the Senate Committee on Capital Market, Mr Ibikunle Amosun, has appealed to the Securities and Exchange Commission (SEC) to think outside the box and come up with ways the federal government can generate more funds and improve the economy.
The current administration under President Muhammadu Buhari has plunged the nation into huge debts, and despite earning from crude oil sales and raising taxes, the country is unable to fund its budget without borrowing.
This has put the economy under pressure as most revenues generated are used to service debts, making many citizens worry about the future of the nation.
But the immediate past Governor of Ogun State believes that the capital market has the capacity to assist Nigeria in achieving its economic goals if given the needed support.
Speaking at the budget defence exercise by SEC in Abuja, the chartered accountant advised the agency to explore other areas that could aid in revamping the economy and improve government revenue, promising that the apex regulatory agency in the Nigerian capital market of the support of the parliament.
“The capital market is very important to the development of any economy. When the economy is stressed, the capital market can help,” he said, noting that the committee is very interested in the activities of the market as it is capable of providing the country with the needed long-term funding to get out of the woods as well as fund the budget.
He stated that the capital market in Nigeria was important to the economy of the nation as it was capable of providing the government with the much-needed revenue for infrastructural development.
“We know that globally, nations have been suffering the effects of COVID-19, and Nigeria is no exception. But we believe that with a vibrant capital market, our growth and development will be faster.
“We now know what the capital market can do to rescue the economy at a time like this. If we have to diversify our economy, the capital market has a role to play, which is why we are here to support you. We will support the capital market for our country to realise these economic goals.
“That is why the Senate is very interested in ensuring that our capital market does well. We are here to encourage you in the work that you do to ensure that we achieve success. We will encourage companies to list so as to further deepen the capital market,” he said.
Mr Amosun, who is not returning to the Senate next year, commended the management of SEC for its efforts to deepen the market.
Earlier in his presentation, the Director-General of SEC, Mr Lamido Yuguda, told the senators that despite the global economic climate the world over, the commission had been able to improve its budget performance.
Mr Yuguda stated that due to a series of interactions with the lawmakers in the past, the organisation has been able to explore various areas in a bid to shore up its finances.
“This improvement in our performance is as a result of some of the fees that we introduced at the beginning of this year.
“When we came to you last year, the commission was facing a very difficult financial situation. We had various interactions with this committee, and we were asked to think outside the box so that we could bring measures to improve our performance.
“It is these measures that we started to introduce that have led to an improvement in our performance. We looked inwards and introduced various measures that drastically cut down our expenditures.
“We had a staff strength that we said was top heavy, and we were able to implement voluntarily early retirement programme in 2021 and concluded in December 2021.
“We also turned our attention to the revenue side and we looked at certain areas like the fixed-income market. The fixed-income market is highly regulated by the commission but was not generating revenues for the SEC, so from January 2022, we started accessing a small fee from the secondary fixed-income market. So, it is the combined effect of this that you see in the revenue performance of the commission,” Mr Yuguda said.
He stated that the agency looked at the Collective Investment Scheme sector and explored avenues of improving its performance in a bid to increase the revenues of the organisation.
“The collective investment scheme is one of the areas that account for our improved performance. It has been with us for a decade, but the Commission has not been taking revenues from that sector.
“We have an investment management department, which is devoted to the regulation of the collective investment schemes; we have other services like the monitoring department, which goes out and monitors.
“In terms of funds on this particular side of the market, we have not been taking in many revenues.
“So, effective January 2022, as we announced last year, the commission started taking less than 0.5 per cent of the funds in collective investments schemes so that it will help the commission give good regulation and oversight,” he stated.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south for the fourth consecutive session after it shed 1.18 per cent on Friday, March 13.
The unlisted securities market recorded a loss despite closing without a price decliner, and ending with two price gainers led by Geo Fluids Plc, which gained 1o Kobo to sell at N3.10 per share compared with the previous day’s N3.00 per share. Industrial and General Insurance (IGI) Plc appreciated during the session by 2 Kobo to trade at 54 Kobo per unit versus Thursday’s closing price of 52 Kobo per unit.
When the market closed for the day, the market capitalisation lost N29.83 billion to close at N2.489 trillion compared with the N2.519 trillion it finished a day earlier, and the NASD Unlisted Security Index (NSI) crashed by 49.84 points to 4,160.46 points from 4,210.31 points.
Market activity improved yesterday, as the volume of transactions rose 179.5 per cent to 10.4 million units from 3.7 million units, but the value of trades declined by 68.4 per cent to N29.9 million from N95.0 million, while the number of deals weakened by 11.5 per cent to 46 deals from 52 deals.
Central Securities Clearing Systems (CSCS) Plc remained the most active stock by value on a year-to-date basis with 38.4 million units worth N2.4 billion, Okitipupa Plc followed with 6.4 million units traded at N1.1 billion, and FrieslandCampina Wamco Nigeria Plc transacted 6.3 million units for N584.3 million.
Resourcery Plc ended the trading session as the most traded stock by volume on a year-to-date basis with 1.1 billion units valued at N415.6 million, trailed by Geo-Fluids Plc with 130.8 million units valued at N504.5 million, and CSCS Plc with 38.4 million units worth N2.4 billion.
By Adedapo Adesanya
The Naira continued to claw back some gains against the Dollar in the different segments of the foreign exchange (FX) market, as its value was strengthened on Friday.
In the black market, it gained N10 against the United States Dollar yesterday to close at N1,400/$1 compared with the preceding day’s rate of N1,410/$1, and at the GTBank forex counter, it chalked up N6 to close at N1,385/$1, in contrast to the N1,391/$1 it was traded a day earlier.
Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEX), it appreciated against the greenback during the session by N5.28 or 0.38 per cent to quote at N1,366.23/$1 versus Thursday’s closing price of N1,371.51/$1.
It also improved its value against the Pound Sterling in the official market on Friday by N21.81 to settle at N1,812.99/£1 compared with the previous day’s N1,834.80/£1, and gained N13.86 against the Euro to sell at N1,568.03/€1 versus N1,581.89/€1.
Pressure eased further on the FX market as the Central Bank of Nigeria (CBN) continued interventionist operations this week, selling Dollars to banks to boost liquidity after a $500 million boost last week.
This was complemented by inflows from foreign investors, exporters and non-bank corporates, among others, while Nigeria’s gross external reserves remained above $50 billion, the highest since 2009.
The Governor of the apex bank, Mr Yemi Cardoso, also eased fears of a Naira devaluation, saying the country’s financial system has been strengthened by reforms.
Regardless, external pressure looms as the US Dollar strengthened globally due to its war with Iran, now ongoing for three weeks.
Meanwhile, the cryptocurrency market was largely down as traders and investors continue to align with current realities.
The market is adapting to the conflict in real time. Early in the war, every headline produced an outsized reaction because nobody could price the tail risk. Now, traders have a framework where strikes happen, oil spikes and bitcoin dips only to recover again.
Cardano (ADA) depreciated by 3.8 per cent to $0.2623, Dogecoin (DOGE) lost 1.7 per cent to finish at $0.0948, Ripple (XRP) slumped 1.5 per cent to $1.39, Solana (SOL) dropped 1.4 per cent to sell for $87.33, Binance Coin (BNB) went down by 1.3 per cent to $653.58, Bitcoin (BTC) declined by 1.1 per cent to $70,670.63, and Ethereum (ETH) decreased by 0.9 per cent to $2,078.78.
However, TRON (TRX) appreciated by 1.7 per cent to $0.2941, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Adedapo Adesanya
The price of the major crude oil grade, Brent crude oil, closed above $100 on Friday for the second consecutive session, as the Iran war heads toward its third week, with oil tanker traffic through the Strait of Hormuz still effectively at a standstill.
It gained 2.67 per cent or $2.68 during the trading day to close at $103.14 per barrel, while the US West Texas Intermediate (WTI) crude oil grade appreciated by 3.11 per cent or $2.98 to settle at $98.71 per barrel.
Brent futures were up about 10 per cent for the week following the 27 per cent rise seen last week, which marked the biggest weekly gain in oil prices since the COVID-19 pandemic in 2020. WTI futures, which saw their best week since 1983 last week, ended the week more than 8 per cent higher.
US President Donald Trump said American forces launched a major bombing raid on Iran’s strategic Kharg Island, targeting military facilities on the key Persian Gulf outpost while warning Iran that its vital oil infrastructure could be destroyed if shipping in the Strait of Hormuz is disrupted.
The terminal accounts for roughly 90 per cent of Iranian crude shipments, loading millions of barrels per day onto tankers bound largely for Asian markets.
The US and Israel’s strikes in the conflict have largely targeted Iranian military and nuclear infrastructure. Oil facilities elsewhere in Iran have been hit, but Kharg’s massive storage tanks, jetties, and pipelines had remained untouched until the latest strike.
Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep fighting in a message delivered via state television.
There have been a number of attacks on foreign ships in or near the Strait, feeding into concerns that a prolonged war could translate to a global economic shock.
Prices are rising despite the US and its allies rolling out some measures to keep a lid on energy costs.
The International Energy Agency (IEA) has agreed to release 400 million stockpiled barrels, the largest such action in history.
The US has issued a 30-day waiver for India to purchase sanctioned oil from Russia. President Donald Trump is considering loosening rules under the Jones Act that require American ships to transport goods between domestic ports, including oil and gas, in an effort to lower costs.
Traders are continuing to monitor developments in the Middle East.
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