To reverse the negative trends of unemployment and poverty and propel real growth, the Association of Issuing Houses of Nigeria (AIHN) has said the country requires capital investment of N35 trillion per annum consistently over the next 10 years.
The association stated this in a communique signed by its President, Mr Chuka Eseka, at the end of its first business lunch meeting held in Lagos recently.
The AIHN which stated that Nigeria is a N140 trillion economy, noted that if the capital market is properly incentivised can facilitate the N35 trillion investment in the economy.
It noted that although Nigeria is out of recession, growth has remained is anaemic at approximately two per cent; inflation has moderated from 18 per cent to 11 per cent, but has remained sticky above the CBN’s target of 6-9 per cent.
Unemployment rate has reached new levels, increasing from 9.9 per cent in the third quarter of 2015, to 23.1 per cent in the third quarter of 2018, while underemployment has also jumped from 17.4 per cent to 20.1 per cent within the same period.
However, revenue in the country has improved by an estimated 41.2 per cent but underperformed by an estimated 47.6 per cent relative to budget in 2018, the fiscal deficit has remained elevated but reduced to 2.6 per cent of GDP in 2018.
“The capital market is the barometer for measuring the health of the economy. Since the global financial crisis of 2008 – 2009, Nigeria’s capital market has been constrained in fulfilling its mandate to drive the growth and development of the biggest economy in Africa.
“The capital market provides a good platform for addressing many of Nigeria’s economic challenges. The AIHN must take the initiative to influence the new administration’s implementation strategy of its Economic Recovery Growth Plan (ERGP) by pointing out areas where funding can be more easily accessed from the capital markets if appropriate reforms are introduced.
“For the capital market to fulfil its 10-year masterplan, government policies and support are needed to drive activities that will encourage private sector participation to drive fundraising from the capital market,” the AIHN stated.
The listed four key areas the government should focus on to include policy reforms that promote market economics; liberalisation of the oil and gas sector; power sector optimisation; and private sector-led infrastructure development
“To deliver economic growth, revenue generation must be a priority for government. We must stimulate productive activities within the economy that will generate revenue. Private sector efficiency is critical in harnessing the potential infrastructure development. Increased efforts must be made to galvanise Foreign Direct Investment (FDI) as well as domestic investment.
“For the power sector to thrive, government must create an enabling environment and address existing governance, legal, regulatory, funding and pricing issues,” the communique added.