Ngozi OKAFOR, London
NIGERIA seems to have turned the corner in its ability to attract direct foreign investments and the economy will receive a bigger boost if the Petroleum Industry Bill (PIB) is passed by the National Assembly.
These were the submissions of experts at the Nigerian Capital Markets Forum 2014, held at the Sofitel London Hotel in Piccadilly Circus at the weekend.
According to Miguel Melo Azevedo, Head of IB, Portugal and Africa, “ the interest in Nigeria is great these days.” He said further, concerning the country: “It’s the only market where investors feel safe. I feel investors are very comfortable,” with Nigeria.
Azevedo said further: “If Nigeria becomes the country with the largest GDP in Africa, it won’t be big news, it will only generate more interest .”
This is even of more importance, as Seplat Petroleum is set for history by becoming the first Nigerian firm to have dual listing on both the Nigerian Stock Exchange and the London Stock Exchange later this month.
In his keynote speech, entitled: “Nigerian Capital Markets Outlook 2014 and beyond, Repositioning for Growth,” the Chief Executive Officer of the NSE, Oscar Onyema said not only are “the markets back,” after the global recession, the “market is –actually –on the move.”
He revealed that in 2012, the NSE ”posted thirty eight per cent returns in dollar terms.”
Onyema told the Forum: “You’ll see Nigeria has been very competitive and is one of the top ten (investment destinations) in the world, in terms of all share index.”
He described the NSE as a “truly international market,” and enthused: ”Liquidity is also coming back … half of the market is foreign and half is local.”
Continuing, he said: “The NSE is here to stay and we’ve built a solid foundation to ensure it stays.”
Onyema disclosed that the global recession of 2008 was “the first downturn” to be experienced by many local investors and that the “reforms we’ve seen in the Nigerian financial sector was driven by foreign investors who came back,” adding that the reforms were particularly needed, because “we cannot afford a scandal where investors lose confidence,” in the country.
The NSE top official made special mention of pensions funds as one of the factors responsible for the growth of the Exchange. He said: “The Pension Act has been a major boost,” and “the pot has grown to over 4.8 trillion naira.”
However, he said some of the laws (Company and Allied Matters Act, in particular) governing the sector are obsolete and as such, “those laws need to be updated.”
He told the forum: “We can champion the development of those laws by engaging the lawmakers so as to come up with better laws.”
For instance, he disclosed that “Pension law forbids pension funds from investing in companies that haven’t been paying dividends for five years.” But he argued that “dividend payment is not the only benchmark for measuring a good company,” as “Microsoft didn’t pay dividends for many years.”