The Federal Government will explore capital market opportunities to finance the infrastructure deficit.

Vice President Kashim Shettima said the funding should preferably come from the domestic capital market rather than through foreign borrowing.

He spoke in Lagos at the opening of the third West Africa Capital Market Conference (WACMaC).

Its theme was: “Infrastructural Deficit and Sustainable Financing in an Integrated West African Capital Market”.

The conference was a joint event of the West Africa Securities Regulators Association (WASRA), the Economic Community of West African States (ECOWAS), the West Africa Capital Market Integration Council (WACMIC) and the West African Monetary Institute (WAMI).

According to him, the centrality of capital markets to Nigeria’s development trajectory, especially to the evolution of the corporate sector, industries and perhaps most importantly, infrastructural development, cannot be over-emphasised.

He said the “infrastructural deficits waiting to be filled” “are better filled from inside, not through foreign borrowing alone”.

Shettima was represented by Dr Tope Fasua, Special Adviser to the President on Economic Affairs, Office of the Vice President.

He noted that with the huge infrastructural deficit estimated at $3 trillion and similar challenges in the West African region, the Nigerian capital market and other markets across the region have their jobs well cut out for them.

“The job of the capital market in Nigeria is therefore cut out for it. And this extends to West Africa, and Africa at large. 

“This is a time of intense competition among nations and resources, and with the advancement of technology, nations are able to reach into nations with their products, just as businesses have their fingers in billions of pockets the world over,” Shettima said.

He underscored the importance of deepening the capital market with innovative products and technologies to attract new generations of youthful investors.

He urged West African stock exchanges, operators and regulators to think hard to find liquidity, growth, and sustainability in their markets.

“I beseech you to deliberate in your meetings on how to meet the challenges where they reside presently. Meet young West Africans online. Create Apps that they can relate to. 

“Use blockchains where necessary to show transparency and to give them some of the control that they seek.  

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

He pointed out that while savings might be shrinking, and economic crises might have caused a shrinkage in investible funds, still these savings and funds are available but only the truly innovative market will have access to them.

“The times call for innovation, ingenuity, thinking ahead and at the speed of light, inventiveness, diversification of product offerings, continuous education and interactions with the public at every platform, on 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 or find ways of confusing folks about their registration or affiliations with capital market regulators, just to run scams on people,” Shettima said.

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He urged capital market stakeholders to develop a deliberate engagement that shows the value, solidity, history, structure, resilience and sustainability of the capital market to the younger generations to promote savings and investments in the formal capital market, the very last bastion of development and opportunities in the world.

Lagos State Governor Babajide Sanwo-Olu said governments are aware of the imperatives of addressing infrastructure deficit and sustainable financing in the region.

He said the theme was apt as across the sub-region, modern infrastructure such as roads, rails, ports, fibre optics connectivity and power are largely inadequate.

“These perennial inadequacies have hindered the economic growth of our various nations and the economic development of our people.  

“It, therefore, behoves us to deliberate on ideas and financial strategies that can bridge these infrastructural gaps, enhancing the quality of life of our people and propelling our economy to greater heights.

“While governments like ours continue to make efforts at plugging the huge infrastructural deficits, we cannot do it alone.

“That is why we are collaborating with you 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, can ease this gap.

“I see you as strategic partners with us and indeed we can build that ecosystem that we all crave. 

“We believe there are many ways the West African capital market can help in this regard,” Sanwo-Olu said.

He said the cooperation between the various capital market bodies could further foster the development of the region.

Director General of the Securities and Exchange Commission (SEC) and Chairman of West Africa Securities Regulators Association (WASRA), Mr. Lamido Yuguda, said the conference was conceived as a platform to address crucial issues related to the orderly growth and development of regional and continental capital markets.

He explained that the ongoing integration of the capital markets across the region is divided into three phases.

Phase I is the facilitated trading between the stock exchanges in the sub-region, through the Sponsored Access model: Phase II, currently underway, is set to harmonise 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.

“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 capitalisation of $98. 28 billion, is proud to host the 3rd WACMAC. 

“This conference takes place at a time when President Bola Ahmed Tinubu serves as the Chairman of ECOWAS, underscoring Nigeria’s pivotal role in the region. 

“We are confident that this event,