FG To Boost Stock Market With $25bn Infrastructure Fund – Finance Minister

BEVERLY HILLS, November 27, (THEWILL) – The Federal Government Thursday restated its commitment to the establishment of a $25 billion fund for infrastructure investment to deepen the nation’s capital market.

Minister of Finance, Mrs. Kemi Adeosun, who made this known in Lagos, said that Federal Government had concluded arrangements for the establishment of the fund.

“Government is already planning to set up a $25 billion fund wholly dedicated to infrastructure investments,” she said.”

Adeosun spoke at the inauguration of the Capital Market Master Plan Implementation Council (CAMMIC), National Investor Protection Fund (NIPF), and the launch of Corporate Governance Scorecard for quoted companies.

The minister was represented by the Permanent Secretary in the ministry, Alhaji Mahmoud Isa-Dutse.

Adeosun also commended the Securities and Exchange Commission (SEC) and the entire capital market community for the laudable initiative of articulating a long-term strategic development blueprint for Nigeria's capital market.

She said that the establishment of the fund was in line with government's recognition of the critical role of the capital market in the nation’s development.

Adeosun said that the fund would be wholly dedicated to infrastructure development.

She urged SEC to ensure that the rules on securitisation were released as soon as possible.

“Securitisation is the process of taking an illiquid assets or group of assets and through financial engineering, and transforming them into a security,'' she said.

“An immediate task for SEC is to ensure the rules on securitisation are released as soon as possible while market operators should already be scouring across the country for infrastructure projects that can be packaged and financed through securitisation.

“In the current environment of significant revenue squeeze and other budgetary constraints, these investments will clearly not come from government’s coffers alone.

“We believe this is where the capital market can really make itself relevant by stepping in to close the funding gap.”

Adeosun urged the capital market community to come up with other innovative ways of mobilising the capital needed to address the nation’s infrastructure challenges.

The minister said that capital market was critical to economic development as it provides investment avenues and efficient allocation of capital to growth sectors.

“Nigeria needs and deserves a capital market that is characterised by high levels of liquidity, depth, breadth and sophistication to enable rapid socio-economic development,” she said.

Adeosun, however, expressed dissatisfaction that currently less than three per cent of Nigerians invested in the capital market, while only 0.2 per cent invested in mutual funds.

Earlier, the SEC Director-General, Mr. Mounir Gwarzo, said that the 10-year Nigerian capital market Master Plan, should consider investors' protection fund as a critical factor for restoring and sustaining investor confidence.

“We have provided the take-off grant for the initial operation of this Fund.

“Going forward, however, the entire capital market community should come together to discuss details of how we can all contribute to continue funding for this critical market vehicle,” Gwarzo said.