State governors have urged regulators to review the processes involved in raising funds in the Nigerian capital market to make it easier and more attractive for subnationals to raise funds for long-term projects in the market.
The governors, who spoke at the inaugural Nigerian Exchange Limited (NGX) conference held in Lagos, expressed concern over the regulatory bottlenecks and burdens involved in the capital raising process. on the market.
They highlighted the need for the Securities and Exchange Commission (SEC) to introduce a debt issuance checklist review process, which will help reduce the time to market for debt securities and encourage more emissions.
Specifically, Edo State Governor Godwin Obaseki said there is a need to review the lead time for approval of capital raising proposals.
According to him, the adoption of digital technology, fundraising processes and procedures can be facilitated while the time frame in which approval is given by the committee for questions and fundraising could be significantly reduced.
“The market regulations need to be reviewed, the market is getting smarter now, if there is a viable project, one should be able to go to the market and raise funds easily.
“Due to the regulatory constraints present in the market today, we have not approached the market to raise funds, but we have raised in other forms,” he said.
However, Obaseki instructed the sub-nationals to come up with long-term development programs with investment needs and continuity plans to drive growth.
“The market needs to see that the state has long-term capital. Some local authorities have not drawn up infrastructure and development programmes. When you have this kind of initiative, the market takes you seriously.
Sokoto State Governor Aminu Tambuwal said regulators should review sub-national development projects and support their fundraising exercise regardless of their time frame for leaving office.
He pointed out that regulators are “developing cold feet” by approving proposals from sub-nationals who have a limited time to remain in office due to doubts about continuing with the project the money is being raised on, especially in the event leaving the office.
Tambuwal urged regulators to refrain from such an act to speed up development and prevent delays in the execution of long-term projects
He argued that government is a continuum, saying sub-nationals should be allowed to raise funds no matter how long they are out of office.
“We have to start seeing government as a government that doesn’t individualize governance. Regulators should be looking at schedules, not individual governors or deadlines for leaving office. Subnationals need to be properly guided on how to access NGX funds to drive development. »
The Chairman of the Nigerian Governors Forum (NGF), Dr. Kayode Fayemi, said that Ekiti State currently has a state-owned enterprise which is licensed to private sector agents.
He said plans are underway to transform these assets and then list them on the stock exchange.
“There are opportunities for the capital market to look at the broader market and there is also a need to look beyond the traditional way of raising capital to deepen the market.”