Capital market well positioned to aid realisation of budget 2023 — SEC


By Philemon Adedeji

The Securities and Exchange Commission (SEC) has expressed the firm belief that the Nigerian Capital Market, being an organised and specialised financial market that drives capital mobilisation through domestic savings and foreign capital inflows, is well positioned for the realisation of the objectives of the 2023 Budget of Fiscal Consolidation and Transition.

This was stated by Director General of the SEC Mr. Lamido Yuguda in an interview at Abuja over the  weekend.

Yuguda disclosed that the Nigerian equities market ended the year on a positive note as the NGX All-Share Index (ASI) which started at 42,716.40 points, ended the year 2022 at 51,251.06 points, indicating a 19.98 per cent growth. While the FMDQ, despite the headwinds in the economy, recorded a total market turnover of N199.88 trillion by year-end, which was an increase of half percentage point compared to N198.93 trillion in 2021.

While stating that the year 2022 was a turbulent one that brought with it increased inflationary pressure and consequent increase in interest rates for the global economy, he however expressed optimism that inflationary pressures would be managed in the not too distant future.

He stated that the global stock market posted its biggest annual drop since the 2008 financial crisis, with the MSCI World Index of stocks losing about a fifth of its value during 2022, the worst performance in 14 years.

“Last year, the Nigerian economy faced several challenges, including worsening inflation, rising unemployment, huge fiscal deficit, insecurity, and floods. Additionally, oil theft and volatility in oil prices led to difficulties in foreign exchange management. In an attempt to tame inflation, the CBN raised the monetary policy rate four (4) times during the year, increasing the cost of financing for businesses and dampening corporate activity and performance.

“Despite these challenges, the Nigerian economy grew by 3.52 per cent (year-on-year) in real terms, driven mainly by the services sector, which recorded a growth of 5.69 per cent and contributed 56.27 per cent to the aggregate GDP.”

The SEC Boss disclosed that for the safety and security of the capital market, and to address the deficiencies in the Nigeria’s Mutual Evaluation Report (MER), the Commission has issued new AML/CFT regulations and guidelines, which mandate CMOs to comply with stringent reporting obligations, such as, application of RBS by reporting entities, screening of clients against United Nation’s Sanction List before on boarding, and continuous monitoring of clients among others.

He therefore vowed that the SEC will apply zero tolerance to money laundering, terrorism and proliferation financing violations.

“We must all ensure that we continue with the implementation of the revised Capital Market Master Plan (CMMP), alongside the implementation of other initiatives. Over the years, we have relied on the support of CAMMIC, Technical Committees and Working Groups in the implementation of the Master Plan.

“In line with the RCMMP, we will review and align the structure and scope of work of the various technical committees and working groups to ensure seamless implementation of the plan and continue to rely on the stakeholders.”

The SEC Boss assured that in protecting investors and creating an enabling environment for fit-and-proper capital market operators to thrive, the Commission will prioritise its planned increase of on-site inspections and improved collaboration with Trade Groups and other relevant stakeholders.

He commended the capital market community, for their unwavering commitment, which has played a crucial role in the Commission’s efforts to build a robust capital market adding that, their contributions and support have been instrumental to driving progress in the capital market and the country.