Capital Market Lawyers Examine Opportunities to Improve Nigeria’s Health Sector

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Experts in the capital market, the legal profession and the health sector, have said opportunities in the capital market can be leveraged, to help improve Nigeria’s health sector. These insights are coming, at a time when Covid-19 has exposed Nigeria’s weak and underfunded health care sector. Experts also suggested that the capital market is one of the best instruments, to help fund the health sector in Nigeria.

Speaking at the 2020 Capital Market Solicitors Association (CMSA) Virtual Annual Business Luncheon, Lamido Yuguda, Director General, Securities and Exchange Commission, said the health sector has been grossly underfunded and Covid-19 has exposed this.

Yuguda said the health care sector is in need of infrastructure and manpower, adding that the sector needs investment from the public and private sectors. He further explained that infrastructure financing of the health care sector requires long term financing, and the capital market will be able to fund Nigeria’s health care.

During his Keynote address, Olabode Agusto, Chairman, Advisory Board of First Cardiology Consultants, said the biggest risk that the pool of savings will face is inflation risk, and this is because the long-term rate of inflation on the Nigerian Naira is about 12 percent per annum.

Agusto said this means that, savings held in Naira and debts that will be repaid in fixed Naira terms, will lose purchasing power at about 12 percent per annum, adding that it also means that the returns earned from investing the pool of savings (net of costs) must be at least 12 percent per annum, to protect the buying power of the savings.

“Finally, premiums must also be adjusted, at least, annually, to reflect the purchasing power of the Naira. The bulk of the monies saved to pay for healthcare will be invested temporarily in fixed income instruments (i.e. lent to the Federal Government, State Governments, banks and credit worthy companies in the real sector).”

He suggested that the capital markets can help improve the health care sector, by using contributions from these debates to come up with the final healthcare model for Nigeria, draft the relevant bills and regulations and get them passed.

Speaking earlier at the event, Benjamin Obidegwu, the Chairman, Capital Market Solicitors Association (CMSA), said this year, the Covid-19 pandemic exposed, to a very large extent, the huge infrastructure deficit the country has in its health sector, primarily because of lack of funds, the greater part of which comes from the government. He said this year’s conference therefore, was aimed at broadening the perspectives of the Nigerian healthcare sector, through discussions on access to the financial opportunities in the capital market.

“To ensure that we have an engaging and robust discussion, we assembled a team of highly experienced industry practitioners in the health sector, and capital market operators to share their experience with us”, he said.

During her welcome address, Efeomo Olotu, Chair, Annual Business Luncheon and Partner, George Etomi & Partners, said this year, they decided that discussions will focus on the current climate in the Nigerian health sector following the Covid-19 pandemic, and the role expected of the capital market in creating pathways in strengthening the stunted health sector through easy access to capital, in resolving the prevalent challenges against affordability, accessibility, liquidity and funding.

Olotu said the opportunity afforded by digital technology in reaching a wider audience who hold a similar interest in capital market operations, adding that 1,200 attendees registered for the event as against 400-500 participants at past annual events.