In a bid to position the Nigerian capital market for private sector investment-led economic transformation, the Securities and Exchange Commission (SEC) and the African Development Bank Group (AfDB) today signed in Abuja a grant agreement for a market surveillance system project .
The grant, worth $460,000, is intended to fund technical assistance and capacity building for capital market development under the “Nigeria Securities Market Surveillance System Project” .
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Speaking at the formal signing of the agreement, AfDB Managing Director Lamin Barrow said the grant from the Capital Markets Development Trust Fund (CMDTF), a multi-donor trust fund administered by the AfDB and supported by the Ministry of Finance of Luxembourg and the Ministry of Foreign Trade and Cooperation of the Netherlands, will support the acquisition, installation and deployment of an automated real-time securities market monitoring system for the Nigerian capital market.
Barrow said: “Today’s ceremony marks another important milestone in our partnership and efforts to modernize Nigeria’s capital markets and ensure it is well placed to support the sector’s investment-led economic transformation. private.
“The introduction of a surveillance system will enhance oversight of securities trading on all existing and future trading platforms and on all SEC-tradable securities and products. This will therefore preserve the integrity of the securities market, enhance investor confidence and improve financial inclusion, among other expected results.
He pointed out that to ensure proper implementation and sustainability, the design of the technical assistance project incorporates training activities to build the capacity of users of the securities market surveillance system, and the preparation of operational manuals. relevant and workflow processing and document management for the monitoring solution. .
He further highlighted the Bank’s support for the project to promote the development of a competitive, deep and liquid capital market supported by an enabling regulatory environment that can effectively leverage resources from the growing institutional investor base. of Nigeria, the private sector and international capital to finance sovereign and corporate investment programs.
“The technical assistance builds on the SEC’s initiatives to strengthen the supervisory and regulatory framework, as well as improve market integrity and transparency as part of the Capital Markets Development Master Plan of Nigeria 2015-2025, with a view to positioning Nigeria as an attractive destination for portfolio investments.
“It also aligns well with the Bank’s Country Strategy Paper for Nigeria 2020-2024, which recognizes the importance of a sound, well-regulated, resilient, efficiently functioning and globally competitive financial market in the Nigeria for sustainable growth and development,” he said.
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Barrow said that at a time when economies were rocked by global shocks, improving the attractiveness of capital markets for domestic and international portfolio investors had become imperative for greater resource mobilization and strengthening resilience to support Africa’s economic recovery.
He said the pandemic has heightened global risk aversion, prompting international investors to shift their portfolios to safer assets and safe havens.
He expressed his desire to see equity market growth well beyond the current N28.16 trillion, supported by the continued growth of the corporate bond market in Nigeria.
SEC Managing Director Lamido Yuguda expressed the Commission’s appreciation to the AfDB for providing the grant support to execute important projects, especially the project to acquire a surveillance.
Yuguda said a market surveillance system was needed to help the regulator detect and deal with market abuse as quickly and efficiently as possible, and proactively prevent major breaches.
An automated market surveillance tool will strengthen the Commission’s role in protecting investors, ensuring a transparent, fair and orderly market and reducing systemic risk.
Yuguda said the surveillance solution would also contribute to an increased impact on gross domestic product through the role of the capital market in the efficient intermediation and allocation of capital to the real economy to create jobs, encourage savings and facilitate wealth creation, as well as increase investment in the economy through foreign direct investment and growth in the participation rate of domestic investors in Nigerian markets.
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Yuguda revealed that the SEC was implementing a comprehensive market and institutional reform program aimed at repositioning the Nigerian capital market to be globally competitive and an attractive destination for business. investment in Africa.
The Ten-Year Capital Market Master Plan (2015-2025) sets out the vision, goals and initiatives needed to achieve this goal.