Making The Capital Market Attractive to Indigenous Investors

Recently, the Director- General of the Securities and Exchange Commission, Mallam Mounir Gwarzo, was on the floor of the national Assembly (NASS), lamenting the low patronage of one percent of citizens in the country’s capital market and that the commission was targeting to increase it to five percent in the next 10 years.

Really, the targeted increase of another four percent in the next 10 years exposed the unpreparedness and short-sightedness of SEC in attracting Nigerians to the capital market and I sincerely wish to encourage them do more.

To be candid, SEC could do more if the issue is deeply and seriously reflected upon with the determination to make A BIG DIFFERENCE, and l have the following suggestions.

THE MAGIC

We could increase the participation from the current one percent to a higher figure of around 40-60 percent in the next 10 years, if it were the intention, vision and mission of SEC to seriously work on long-term-attractiveness-project on Nigerians in order to improve participation in the market from the current position of one percent.

Education on the capital market must be directed at both rural, urban, educated, less-educated, professional bodies, in both formal and informal sectors of the economy, while SEC/NSE and other stakeholders should specifically target the “less-privileged”, because they could free their resources for long-term investments (which is the bedrock of capital market) and might show less interest in speculative investments.

WORKERS & ALL INCOME EARNERS

Fixed income earners must be educated that it is another way to earn extra income while still working, and to encourage savings towards their retirement. Workers from day one of engagement should be educated and encouraged to get involved in capital market activities, no matter how small their investments might be as beginners.

Employers of labour – federal, state and local governments and agencies in the private sector, including the informal sectors – with the assistance and encouragement of SEC/NSE/Stockbrokers should be part of The Capital Market Activities Campaign and sell its benefit to the nation’s economy and her citizens.

ENLIGHTENMENT

The campaign should now be moved by SEC/NSE from “Overseas-Road-Shows” to the Nigerian schools, work-places, ministries, agencies, markets, mechanics, builders and vulcaniser workshops etc.., technical colleges, higher institutions, masons, petty traders, motor parks and all professional bodies with encouraging captions like “Extra Retirement Benefit for Workers” and “Retirement Opportunities for The Informal-Sector”.

NIGERIANS IN DIASPORA

SEC, NSE and other stakeholders should create platforms via Nigerian Embassies for them to get involved with great assurance on the safety of their investments, while all operational loopholes should be blocked with higher sanctions on defaulting operators.

OPPORTUNITIES

One of the greatest side-effects and opportunities is the likely reduction in corrupt practices in Nigeria when citizens know that they can get extra incomes through capital market investment, that will reduce pressure on their cash-demands.

It will also encourage savings that would then be a vehicle for creating more wealth and better retirement packages for citizen-investors and above all it will give the capital market the needed long-term investment regime and economic stability that is the hallmark of every progressive capital market, as well as discourage speculative activities.

CONCLUSION

The magic to making the capital market attractive to citizens is to refocus on the home-front with seriousness of purpose and great determination to achieve results,  and to now run less after foreign portfolio investors, those that l tag: ‘Casino Players’. We should make policies that would discourage foreign investors from off-loading stocks that were bought less than A YEAR AFTER PURCHASE in the capital market.

If this is done, a lot of cash that is outside the banking industry would find its way to the capital market sooner than later. Believe me, WE CAN and WE SHALL.

Really, I wish SEC, NSE and other stakeholders the best of luck and much can be expected, with hard work and determination of purpose.

Alhaji Gbadebo OLATOKUNBO is a shareholder activist and co-founder of Nigeria Shareholders Solidarity Association (NSSA) in 1985. He can be reached on: 08055514565, 08099148585.