Shettima: Capital Markets can Help Bridge West Africa’s Infrastructure Deficit

Kayode Tokede

The Vice President, Senator Kashim Shettima, yesterday said that the infrastructural deficit in the West African sub region are better tackled from inside and not through foreign borrowing alone, stressing that the job of the capital market in Nigeria and across the region is therefore cut out for it and this extends to Africa at large.

Shettima stated this at the opening ceremony of the 3rd West Africa Capital Market Conference (WACMaC) with the theme: “Infrastructural Deficit and Sustainable Financing in an Integrated West African Capital Market,” held in Lagos.

Shettima who was represented by Special Adviser to the President on Economic Affairs in the Office of the Vice President, Mr. Tope Fasua  said the centrality of capital market to Nigeria’s development trajectory especially to the evolution of corporate sector, industries and most importantly  infrastructural development cannot be over emphasised, adding that thus, it is a time of intense competition among nations and resources, and with advancement in technology, nations are able to reach to nations with their products just as businesses have their fingers in billions of pockets the world over.

The Vice President said “Innovations has turned out more than ever to be both a potent advantage and disadvantage depending on one’s readiness to engage. In deed it is said that the best way to prepare for the future is to create it. Where are we on this? Whereas capital market development in any nation is not an easy task, much less its maintenance and sustainability.

“We must commend the efforts of entities, governments, corporates and individuals across West Africa who have over the time come together to put in the shift that got us here.  There are three exchanges in the sub region, Nigeria, Ghana and Cote I’voire with others coming up.

“The question is why have other West African nations not developed their exchanges? How do they hope to leverage on the advantage of capital formation, corporate governance and also to get companies fund in them to someday play big in the global stage?”

The Vice President, therefore, urged regulators and operators to be deliberate on how to meet the challenges the capital market presently faces by meeting young West Africans online, creating apps that they can relate with, using block chains where necessary to show transparency and to give them control that they seek.

“Show them value, solidity, history, structure, resilience, sustainability so that rather than invest in reckless risky ventures where their monies disappear on daily basis, they will learn the beauty of capital market investments and will through your efforts invest in the companies and instruments that will guarantee the future of West Africa, the very last bastion of development and opportunities in the world.

“We have only just begun, we have seen the surge of cryptocurrencies and other instruments and traits in West Africa and not all the stories had happy endings. We must understand that though savings maybe shrinking across the world and economic crisis have caused the shrinkage in investable funds, still those funds are there and only the truly innovative will access them.

“These times calls for innovation, ingenuity, thinking ahead and at the speed of light, inventiveness, diversification of products offerings, continuous education and interaction with the public at every platform, online and offline. We have to do all that it takes legitimately to establish a solid base for our capital market to weed out unscrupulous elements who get into the market and find ways of confusing folks about their registration and affiliations with capital market regulators just to run scams on people and I know that SEC has always been pursuing a lot of these people around” he stated.

He implored West Africa Regulators and Operators to think hard to find liquidity, growth and sustainability in their markets saying if stock exchanges in developed countries still thrive like New York, London, Amsterdam, Bombay and Egypt there is no reason why West African exchanges should not thrive.

“There must be reasons why these entities are still thriving and those reasons are the fundamental underpinnings that must be explored to gain purpose, to find strength, to discover resilience and establish sustainability.

“My role is to encourage your work and to through these words imbue you with some additional impetus, purpose, clarity and strength as it is not over until it is over. And it should never be over for the capital market in West Africa and I am glad to see the co-operation that has been going on among you” he added.

In an address, Executive Governor of Lagos State Mr. Babajide Sanwo-Olu said the co-operation between the various bodies fortifies the bedrock of the W/African region fostering a collaborative spirit among member states.

Sanwo-Olu said governments are actively aware of the imperatives of addressing infrastructure deficit and sustainable financing in the region. He said the theme of the conference is especially apt for the moment as across the sub region, modern infrastructure such as roads, rails, ports, fibre optics connectivity power etc. are largely inadequate.

“These perennial inadequacies have hindered the economic growth of our various nations and economic development of our people.  It behoves therefore on us to deliberate on ideas, financial strategies that can bridge these infrastructural gaps, enhancing the quality of life of our people and propelling out economy to greater heights.

“While governments like ours continues to make efforts at plugging the huge infrastructural deficits, we cannot do it alone and that is why we are collaborating with you and say we are waiting to see the types of innovative instruments and ideas that you can bring forward for us to be able to do the quick and very difficult work that you have asked us to do”.

“Only innovative and creative financing especially the products coming out of the capital market that can ease this gap, I see you as strategic partners   with us and indeed we can build that ecosystem that we all crave for. We believe there are many ways the West African capital market can help in this regard” the Governor added.

In his opening remarks, Director General of the Securities (SEC) and Exchange Commission and Chairman of West Africa Securities Regulators Association, WASRA, Mr. Lamido Yuguda stated that the Conference (WACMaC) was conceived as a platform to address crucial issues related to the orderly growth and development of regional and continental capital markets and jointly hosted by WASRA, the Economic Community of West African States (ECOWAS), the West Africa Capital Market Integration Council (WACMIC), and the West African Monetary Institute (WAMI)..

Yuguda said, “In 2010, the establishment of the West African Capital Market Integration Council (WACMIC) marked the inception of our collaborative effort to create a seamless and unified capital market within West Africa. Five years later, the formation of the West Africa Securities Regulators Association (WASRA) further solidified this commitment to harmonizing the regulatory environment for financial securities issuance and trading.

“WACMIC and WASRA bring together the securities exchanges, central securities depositories and commissions of the sub-region, comprising Cape Verde, Ghana, Nigeria, and the Union Economique et Monétaire Ouest Africaine (UEMOA), with Morocco as an observer member.  Our mission, as outlined in the ECOWAS Commission Treaty, is to facilitate the issuance and trading of financial securities across the region.

The DG disclosed that the integration project in the region is divided into three phases: Phase I facilitated trading between the stock exchanges in the sub-region, through the Sponsored Access model: Phase II which is currently underway, is set to harmonize and validate regulations for the trading and settlement of securities in West African capital markets through the Qualified West Africa Broker (QWAB) model. This phase with a target completion date of June 2024 is made possible through funding from the African Development Bank (AfDB) and is implemented by the West African Monetary Institute (WAMI).

He said Phase III holds the promise of delivering a fully integrated market and the establishment of the West Africa Securities Market, which will reflect securities listed on all member exchanges. This phase is expected to deepen West African capital markets, attract institutional and retail investors across member countries, and broaden the range of capital market instruments and issuances for funding private and public enterprises and infrastructure in the region.

The WASRA Chairman stated that “These gatherings have been instrumental in shaping the integration project, expanding the membership of WASRA and WACMIC to include Cape Verde, and advancing our collective mission. Nigeria, with its vibrant capital market and a market capitalization of $98.28 billion, is proud to host the 3rd WACMAC. This conference takes place at a time when Nigeria’s President, His Excellency, Asiwaju Bola Tinubu, serves as the Chairman of ECOWAS, underscoring Nigeria’s pivotal role in the region. We are confident that this event, will foster integration, encourage capital formation, promote tourism, and attract investors.