Uwaleke: Capital Market Has Potential to Finance NDP, Attain Ambitious $1tn Economy

Kayode Tokede

The Professor of Capital Market, Nasarawa State University Keffi, Prof. Uche Uwaleke, yesterday stated that the capital market has the potential to finance the National Development Plan (NDP) of the federal government, stressing that the utilisation of the market can attain the ambitious goal of a $1 trillion economy within the decade.

President Bola   Tinubu had told the business community at the Nigerian Economic Summit (NES) recently that Nigeria’s economy can grow to $1trillion by 2026, adding that a $3trillion Nigerian economy is possible in 10 years.

The 2021-2025 NPD targets a five per cent growth rate in Gross Domestic Product (GDP) on average, generates about 21 million full-time jobs, and lifts 35 million people out of poverty by 2025.

Uwaleke, who delivered his keynote address at the 2023 conference organised by the Capital Market Correspondents Association of Nigeria (CAMCAN) in Lagos, called on the government to establish capital market-based infrastructure funds.

The theme of the 2023 CAMCAN conference is: “Leveraging the Capital Market in Financing the National Development Plan.”

He added that the financing of the NDP through the capital market would depend to a large extent on breaking the barriers to its development.

“Efforts to meet the current challenges of the Nigerian capital market will inevitably set the stage for it to play a prominent role in not only achieving the growth targets set in the country’s NDP but also the dream of a $1 trillion economy within the next 6 years,” he said.

Uwaleke, who is also the President of the Capital Market Academics of Nigeria urged the government to utilise more infrastructure bonds when borrowing from the domestic market, stressing the need for privatised government enterprises to be listed on the Nigerian Exchange Limited (NGX).

He noted that “In order to narrow this gap, according to the National Integrated Infrastructure Master Plan, Nigeria needs to invest $3 trillion in infrastructure over the next 30 years -$100billion annually in other words

“This translates to a yearly investment of over N42 trillion! This is more than the size of the total annual budgets of the federal and Sub National governments.

“No doubt, financing this huge infrastructure gap presents a formidable challenge to the government given Nigeria’s low revenue to GDP ratio of less than 10per cent making inevitable the capital market route.”

He opted that the short-term funding profile of the money market makes it unsuitable for capital formation to fast-track economic growth and development.

He highlighted that weak domestic economy, poor savings mobilization, small size relative to GDP, Market processes/ Time to Market, Low Capital Market Literacy are among the major barriers to capital market development in Nigeria.