Minister of Finance and Budget, Zainab Ahmed, has told the Nigerian Stock Exchange (NSE) to improve its retail investment, to position the capital market as an alternative credit source for the Federal Government.
Ahmed said retail investment must be encouraged to improve the financial capacity of Nigeria’s capital market, and that past experiences proved that the Nigerian bourse is capable.of funding Nigeria’s budget.
The country’s 2021 budget is N13.95 trillion, with a deficit of N5.6 trillion. According to Ahmed, the deficit will be funded by domestic and foreign debts. She said the capital market can become one of the sources for domestic loans.
She made this statement during the 5th Budget Seminar organised by the Security and Exchange Commission (SEC). Ahmed added that government can use the bourse to finance capital project through instrument offerings.
““Past experiences have shown that the capital market has been supportive in providing the necessary funds to finance governments’ projects.
“The budget is N13.95 trillion, capital expenditure of N4.37 trillion amounting to 32.2 percent of the total expenditure and overall deficit of N5.6 trillion to be financed by almost equally domestic and foreign sources.
“Government is committed to introducing more of these instruments in partnership with the capital market, to finance projects for economic growth.” Ahmed said at the budget seminar which was themed ‘Financing Nigeria’s Budget and Infrastructure Deficits through the Capital Market’.
Also speaking at the seminar, the Director-General of SEC, Lamido Yuguda, said for the Nigerian capital market to compete in the world, SEC has the capacity to support infrastructure needs by providing necessary innovation.
Note that the Nigerian capital market was adjudged the best performing stock market in 2020 during the COVID-19 pandemic, but the bourse is gradually losing its appeal, as investors seek other assets with more attractive interest rates.