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CBN, CBO Capital advocate more investments in venture capital

By on December 7, 2013

The Central Bank of Nigeria,CBN and CBO Capital have called for more investments in private equity and venture capital.

They made the call at the just concluded third annual investors’ conference organised by CBO capital in Lagos.
They said that more investments in private equity and venture capital would make more funds available for entrepreneurs in Nigeria and inspire real economic growth, especially in the informal sector.

According to Deputy Governor, CBN, Dr. Kingsley Moghalu, who presented a keynote address on the economic outlook for 2014 at the conference, “Private equity venture is a stake that belongs more to Securities and Exchange Commission, SEC, and some other parts of the financial system. There is no question that this country is in outright reliance on banking for finance and bank lending is short term in this part of the world. It is either three, four or five years. So, the real growth in the financial sector in our economy lies in reducing the dominance of banks and expanding other aspects of finance, including private equity and venture capital.”

Emphasising the critical role private equity and venture capital play in the economy, he said, “Studies have shown that in most parts of the world where private equity and venture capital function, they create a lot of jobs. I think that when we want to bring foreign investors into Nigeria, we should encourage foreign investors that will address our strategic gaps. There is no question that one of those strategic gaps is private equity and venture capital, especially because venture capital is the lower end of private equity and fits into the entrepreneurial business model that is so much a part of Nigeria’s informal economy.

“And so, the earlier we bring venture capital into this economy, the better it will be for the economy as more jobs would be created. So, we support the view that there should be more venture capital. I think that as a policy focus, we need to lay more emphasis on venture capital.”

 

 

[Vanguard]