Ex-Governor of Anambra State, Mr. Peter Obi, yesterday faulted the Federal Government’s borrowing of money from China to fund airport, saying that financing of such project should be done through the Nigerian capital market.
The former governor also stressed the need for government to come out with regulations that will make big companies and publicly privatised entities to list on the Nigerian Stock Exchange, NSE, stressing that the Nigerian stock market remains shallow because of absence of needed regulations and structures that allow public companies to list their shares on the Exchange.
Speaking at the second Capital Market Summit titled “The Road to Nigeria’s Economic Recovery” organised by the Association of Stock broking Houses of Nigeria, ASHON in Lagos, Obi said “Privatised public assets must be made to list in our market if they must be run profitably and efficiently. The idea of government providing intervention fund is not the best way to go about providing needed infrastructure to drive the economy.” Continuing, he said: “Nigeria has been in contraction for five quarters, so we should work quickly to move away from this recession. There is nothing wrong with borrowing when there is recession, but it must be done reasonably to attract investments and savings. So, borrowing is not bad except when the money is not used judiciously.
“There was no savings yesterday, that is why we are where we are today. The value of our capital market is just too low, about $30billion and that cannot attract foreign investors. We cannot compare ourselves now to Mexico, Taiwan, Turkey, Indonesia, Singapore etc. whose economies were similar to ours in the 1990s.” According to him “As stakeholders in the capital market, we are all aware that the capital market is simply a barometer that gauges the performance of the economy, hence we all have a duty to support the government in whatever form that can bring about dramatic turnaround of our economy as Nigeria struggles to climb out of recession” Continuing, he said “There is a strong correlation between the development of an economy and its capital market. Apart from other roles, capital market primarily helps to mobilise funds from the surplus economic units and channels them to the deficit ones.
This underscores the fact that government’s budget deficit gap and critical infrastructure development can be financed through the instrumentality of the capital market.
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