The Federal Government and the Central Bank of Nigeria have been urged by the Nigerian Exchange Limited to provide listed corporations preference in their procurement procedures and foreign exchange access.
Temi Popoola, the Chief Executive Officer of the NGX, believes that this strategy will lessen the prevailing FX difficulties in the economy and attract more businesses to list on the Exchange.
Speaking at the most recent MTN Capital Markets Day, Popoola noted that NGX is enthusiastic about President Bola Tinubu’s administration and his rekindled hope agenda because it offers a chance to collaborate with regulators and other market stakeholders to address the issues facing listed corporations and the government.
“The singular biggest thing that can be done to change the face of the capital market is not investment bankers wearing suits and knocking on the doors of companies for the next listing but really intentional advocacy,” he said
Popoola added “There are companies that would like to list on our Exchange, but they earn in dollars, their revenue to their bottom line is in dollars. There are also listed companies that would like to pay their dividends in dollars. However, the current regulation does not allow that.
“We are working with regulators and policymakers to try to address that because this would create a lot more benefit to the government which is looking for FX resolutions to their challenges. We believe this will also unlock the dollars that people have saved in domiciliary accounts to be put into useful work in the capital market and economy.”
In addition, the NGX CEO disclosed ongoing discussions with the Federal Government to attract listings through supportive legislation. He argued that increased listings would boost government revenue, citing the transparency, higher tax contributions, and better governance exhibited by listed companies. Popoola highlighted the historical role of government support in facilitating the presence of many companies currently listed on the Exchange.
On the downgrade of Nigeria from a frontier market to unclassified, Popoola said, “This is a subject matter that gathered a lot of headlines but then the reality and the impact were slightly more nuanced. The share of foreign investors in our market is already so small, 10 per cent and in some instances, five per cent so that the real short term impact is not as the headlines would suggested. A lot of those capital would have flown out already.”
