**Gives FG Alternative Funding Tools for Projects
By Dipo Olowookere
For the umpteenth time, the Securities and Exchange Commission (SEC) has listed different ways federal government can reduce the huge infrastructure deficit in Nigeria through the capital market.
Acting Director-General of SEC, Ms Mary Uduk, while speaking at the annual conference of Capital Market Correspondents Association of Nigeria (CAMCAN) last Saturday, said government can narrow this gap by creating an enabling environment for private investors to assist in solving the problem.
Ms Uduk, who was represented at the event by the Head of Department, External Relations at SEC, Mr Sufian Abdulkarim, noted that private sector must be brought into the picture to achieve meaningful results.
“Government cannot be the sole provider/promoter of infrastructure projects, private sector investment in infrastructure sector is also required.
“Given the need to bridge the infrastructure deficit and the challenges of financing it, the county needs to leverage on alternative sources of infrastructure financing, such as the capital market.
“In view of the government’s bid to reverse the current growth trend, diversify the economy and develop infrastructure, there is no better time than now to leverage the capital market for sourcing of infrastructure development financing,” the SEC boss said at the forum themed Bridging Nigeria’s Infrastructure gap: The Capital Market Option.
Ms Uduk described infrastructure development as very important for a country’s sustained economic growth and competitiveness, noting that a well-developed infrastructure has the potential to increase productivity which leads to poverty and unemployment reduction, facilitate trade and promote innovation in an economy.
According to her, the capital market provides an enabling environment for private investments in infrastructure projects and the SEC was doing its part to foster this through the implementation of the Capital Market Master Plan (2015-2025).
She said the plan’s major objective is to transform the Nigerian capital market, making it competitive, while contributing towards the nation’s development through funds mobilization.
“The Nigerian capital market has been used as a source of raising funds as early as 1946, when the colonial government floated the first loan stock worth £300,000 to fund its local administration.
“Today, the Nigeria capital market has broadened and become more sophisticated as a result of various development initiatives advocated by the SEC,” she stated.
The SEC acting DG said, “There are various sources of funds available in the capital market which can be harnessed for infrastructure development, some of which are Pension Funds, Real Estate Investment Trusts (REITs), Collective Investment Schemes (CIS) amongst others.
“In addition, there are various capital market instruments that can be used for infrastructures financing, amongst which are the infrastructure project bonds, sukuk, infrastructure debt bonds, green bonds and revenue bonds.”
She expressed confidence that the establishment of an active infrastructure funds via the capital market as being pursued by capital market stakeholders would be immensely beneficial in closing the infrastructure gaps in the country.
Ms Uduk said Nigeria, and many other Sub-Saharan African countries have huge infrastructure deficits with the attendant low economic development.
According to her, the traditional source of infrastructure funding through public expenditure and development finance aids have been found to be inadequate as evidenced by the country’s infrastructure gap.
Quoting a report by the African Development Bank (AfDB) on Nigeria’s Infrastructure Plan in 2013, she said it was estimated that Nigeria would need to invest about $350 billion in its infrastructure sector in 10 years to be at par with its peers.
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