On Monday, The African Development Bank (AfDB) and the Securities and Exchange Commission (SEC) signed an agreement to extend a $460,000 grant to finance technical assistance and capacity building for capital markets development.
Th agreement is for the development of the Nigerian capital market under the “Nigeria Securities Market Surveillance System Project.”
The Director General, Nigeria Country Department of the AfDB, Mr Lamin Barrow said at the signing ceremony that the grant is from the Capital Markets Development Trust Fund (CMDTF) – a multi-donor trust fund administered by the African Development Bank-and supported by the Ministry of Finance of Luxembourg and the Ministry of Foreign Trade and Cooperation of the Netherlands.
The money is expected to support the acquisition, installation and development of a real-time automated securities market surveillance of the Nigeria capital markets.
Mr Barrow said “today’s ceremony marks yet another important milestone in our partnership and efforts to modernize Nigeria’s capital markets and ensures that it is well positioned to support economic transformation driven by private sector investment.
“The introduction of a surveillance system will enhance oversight over securities trading across all existing and future trading platforms and all tradable securities and products by the SEC. It will therefore preserve securities market integrity, boost investor confidence and enhance financial inclusion, among other expected outcomes”.
He explained that to ensure sound implementation and sustainability, the design of the technical assistance project embeds training activities to strengthen the capacity of users of the securities market surveillance system, and the preparation of relevant operational manuals and workflow processing and document management for the surveillance solution.
The Bank’s support for the project, he added, derives from the Federal Government’s efforts to promote the development of a competitive, deep and liquid capital market supported by an enabling regulatory environment that can efficiently mobilize resources from Nigeria’s fastgrowing institutional investor base, the private sector and international capital to finance sovereign and corporate investment programmes.
Mr Barriw reaffirmed that “It is our desire to see the growth of the equity market well beyond the current N28.16 trillion. underpinned by the continued growth of the corporate bond market in Nigeria”.
In his remarks, Mr Lamido A. Yuguda, Director General, Securities and Exchange Commission commend the AfDB efforts at mobilising and allocating investment resources to Regional Member Countries and for its continued commitment to providing policy advice and technical assistance for economic development in Africa.
He pointed out that the SEC is currently implementing a comprehensive market and institutional reform programme intended to reposition the Nigerian capital market to be globally competitive and an attractive destination for investment activities in Africa.
He noted that the 10-year Capital Market Master Plan (2015-2025) sets the vision, objectives and initiatives required to achieve this goal.
Mr Yuguda averred that working in close partnership with the Bank, the SEC designed a targeted training programme to address identified gaps in regulation and market development to enhance the Commission’s readiness to effectively regulate new products and promote the growth of the capital market.
The SEC DG said the Commission is very pleased and thankful to AfDB for providing grant support to execute very important projects, particularly the project to acquire a surveillance solution.
“A market surveillance system is required to aid the regulator in detecting and addressing market abuse as quickly and efficiently as possible and to proactively prevent major infractions.
“An automated market surveillance tool will enhance the Commission’s role in investor protection, as well as ensure a transparent, fair and orderly market and reduce systemic risk”, Mr Yuguda further stated.
According to Mr Yuguda, with the successful acquisition of a surveillance solution for the commission, the SEC expects “the curtailment of market infractions, a modernised and technology-driven regulatory approach which enhances the protection of investors; enhanced investor confidence leading to the increased participation of domestic investors (both institutional and retail) in the capital market.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur