The Federal Government and the Central Bank of Nigeria have been urged by the Nigerian Exchange Limited to provide listed corporations preference in their procurement procedures and foreign exchange access.
Temi Popoola, the Chief Executive Officer of the NGX, believes that this strategy would lessen the prevailing FX difficulties in the economy and attract more businesses to list on the Exchange.
Speaking at the most recent MTN Capital Markets Day, Popoola noted that NGX is enthusiastic about President Bola Tinubu’s administration and his rekindled hope agenda because it offers a chance to collaborate with regulators and other market stakeholders to address the issues facing listed corporations and the government.
According to him, “the single biggest thing that can be done to change the face of the capital market is really intentional advocacy, not investment bankers in suits knocking on companies’ doors for the next listing.”
Popoola continued, “There are businesses that would like to list on our Exchange, but their revenue is derived entirely from dollars, and they earn in dollars. There are listed firms that want to receive their dividend payments in US dollars. Nevertheless, that is not permitted by the current regulation.
since the government searches for FX answers to its problems, we are collaborating with regulators and lawmakers to try and address it, since it would greatly benefit the government. Additionally, we think that this will allow people to use the money they have saved in domiciliary accounts to make valuable contributions to the economy and capital market.
Furthermore, the CEO of NGX revealed that they are in continuous communication with the Federal Government to encourage listings by means of laws that would be beneficial. Noting the openness, higher tax payments, and improved governance displayed by listed corporations, he contended that more listings would raise government revenue. Popoola emphasized the historical contribution made by the government to the existence of numerous businesses that are presently listed on the Exchange.
Popoola commented, “This is a subject matter that gathered a lot of headlines but then the reality and the impact were slightly more nuanced.” Nigeria was downgraded from a frontier market to unclassified. Since foreign investors already make up only 10% of our market—and often as little as 5%—the true short-term impact will not be as dramatic as the headlines would have you believe. Many of those funds would have left by now.
