The African Development Bank Group has authorized a $400,000 grant agreement with the Securities and Exchange Commission of Nigeria as part of an effort to strengthen securities market regulation as well as broaden market instruments.
The grant, according to the bank. Would be targeted towards strengthening the risk-based supervision framework; regulation of derivatives and green bonds; and building capacity for green finance.
The SEC, Nigeria is the apex regulatory institution of the Nigerian capital market supervised by the Federal Ministry of Finance. Its powers, as enlarged by the legislation, is to regulate the capital market with a view to protecting investors; and developing the capital market in order to enhance its allocative efficiency, and pave the way for a private sector led economy.
The fund which is an alignment with the priorities of the AfDB’s country strategy for Nigeria, would be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the bank.
The Senior Director of the AfDB’s Nigeria Country Department, Lamin Barrow, noted the urgency of the implementation of the project saying,“At a time when countries are striving to build back better from the ravages of the COVID-19 pandemic, improvement of the enabling regulatory and supervision framework will boost domestic resource mobilisation efforts and leverage private sector contributions to achieve a greener, more environmentally sustainable and inclusive post-pandemic recovery,”
According to the bank, this strategy envisages measures to stimulate capital market development to unlock financial resources for productive sector investments, infrastructure development and private sector growth.
The Chief Executive Officer of the Nigerian Stock Exchange, Oscar Onyema, in his appreciation said the project will support the implementation of the SEC’s Nigeria Capital Market Master Plan 2015-2025 and its vision to position Nigeria’s capital market as a competitive and attractive destination for portfolio investments.
SEC 10-year MasterPlan
In November 2015, the Nigerian Securities and Exchange Commission (SEC) mapped out a 10 year plan for the development of the Nigerian capital market (the Master Plan).
The Master Plan, developed by a committee inaugurated by the Director General of SEC, had the core objective to map out strategies for the improvement of the Nigerian capital market in key areas such as investor protection and education, professionalism, and product innovation, and for the expansion of the capital market’s role in Nigeria’s economy.
The strategies devised by the committee includes: to drive capital-raising to fund critical sectors of the economy such as infrastructure, agriculture, SMEs and solid minerals; align the market structure, capabilities and competencies to the requirements of the economy; improve the competitiveness and attractiveness of the capital market; and create a conducive legal and regulatory framework for deepening and developing of the Nigeria capital market.