The management of the Nigerian Stock Exchange, NSE, has said the capital market has the depth to finance the national budget deficit and drive investments in key national infrastructure,.
NSE Chief Executive Officer, Oscar Onyema, who addressed newsmen at the NSE in Lagos on Thursday, January 14 said the sovereign debt market has been on the rise in spite of the current downtrend in the equities market.
He said capital market has the capacity to fund the 2016 budget deficit, which is estimated at N1.8 trillion and to further support the realisation of the Medium Term Expenditure Framework of the government.
While the equities market was in the red in 2015, the NSE bond market rose by a third. Market capitalization for the debt market jumped by 32.7 per cent to N7.14 trillion.
The Federal and State Governments raised N76.5 billion and N35.8 billion in debt capital, respectively. Companies also took to the debt market to raise a total of N112 in seven new listings.
According to him, apart from the federal government raising debt capital directly from the market, other government agencies could be unbundled and made to access the capital market for funds so as to free some cash for the government to fund other areas of development.
“The capital market has an opportunity to effectively finance the FGN’s proposed budget deficit for 2016 and the implementation of its Medium Term Expenditure Framework (MTEF). With greater clarity on policy direction, we anticipate the return of investors who had remained on the sidelines throughout 2015,” Onyema said.
