The Managing Director FBN Capital Limited, a part of FBNQuest,
Kayode Akinkugbe, has stated that the commercial banking community alone cannot meet the requirements for Nigeria’s infrastructure financing.
Akinkugbe made this known as part of a panel on “The Nigerian Capital Market: A Catalyst for Change” during the 2015 Business Luncheon of the Capital Market Solicitors Association (CMSA) held recently held in Lagos.
Speaking at the event, Akinkugbe stated that “Nigeria is at a point in its development where the issue of infrastructure has become extremely critical. Our infrastructure deficit requires us to invest around $30 billion a year for the next decade to catch up.
“The financing requirements are far much more than what the commercial banks can cope with. There is therefore a clear gap, and the right segment of the financial market to fill the gap is the capital market”.
Akinkugbe explained, however, that strengthening liquidity in the capital market is very crucial, especially for confidence.
“If we have counter parties that have strong capital, there will be much more activity in the capital market. Currently, we really don’t have a lot of well capitalized institutions.
“Being well capitalized means you can make investments in distribution. He submitted that to make the investments that are required, properly capitalized institutions are needed.”
From a regulatory perspective, Ms Tinu Awe, Head Legal and Regulations, Nigerian Stock Exchange expressed that there are three paradigm adjustments that needs to be made within the Capital Market industry.
Firstly, according to her, the operators need to collaborate together to challenge the status quo of the financial market.
Secondly, regulators need to take a look at themselves and develop some sort of ‘regulators code’ to guide the execution of their oversight functions, and finally, operators must show greater willingness to be regulated.
“The nature of engagement of the capital market with the various stakeholders needs to be looked at. There needs to be a different model for engaging, particularly with the public sector.
“The way the bankers and the Bankers Committee for example, have built relevance in the national dialogue and with the presidency is an approach that needs to be considered in the capital market community.
“Also how we develop the buy-side in the country is critical, as the banking sector still dominates in terms of financial assets that are managed. We need to look for ways to try and mobilize savings by looking more to collective investment schemes for instance,” Akinkugbe surmised.
FBNQuest featured as a co-sponsor of this year’s edition of the Capital Market Solicitors Association Business Luncheon, an independent self-regulatory body of solicitors and commercial law firms engaged in capital market practice in Nigeria.
The business luncheon is its flagship event organized to discuss topical issues and pragmatic ways to develop the capital market.
The event, now in its 13th year, drew participants from the capital market community, including legal practitioners, regulators, issuers, investment bankers, stockbrokers, trustees and registrars.
In September 2015, FBN Capital Limited, a part of FBNQuest, was recognized as the 2015 Best Africa Investment Bank by the Africa Investor Group.
The firm has also received the award for Best Investment Bank in Nigeria 2015 by Global Finance Magazine for the fourth consecutive year, and the World Finance Banking Award for the Best Investment Bank in Nigeria 2014.
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