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FG, Banks eye N5tn pension fund as National Assembly promises speedy legislation

By on June 8, 2016

The federal government and commercial banks are targeting the whopping N5 trillion pension fund being managed by pension administrators as a means of revitalising the dwindling economy.

This hint was dropped monday at the opening session of a two-day capital market stakeholders’ forum in Abuja organised by the Joint National Assembly Committee on Capital Market.

The fund is being considered as the lender of last resort as the economic crisis rocking the country continues to bite harder.

To enable access to the fund for investment and infrastructural development, the National Assembly has promised to give expeditious passage to proactive capital market legislations with the capacity to boost the nation’s economy.

Speaking at the event, Vice President Yemi Osinbajo who was represented by the Economic Adviser to President Muhammadu Buhari, said there was the need for the capital market to attain its full potentials.

According to him, the utilisation of pension funds would help to boost production, infrastructural development and economic growth.

The vice -president listed priority areas of the federal government to include diversification of the economy; power, roads and rail reforms and ease of doing business, among others.

For effective functioning, he said Nigeria’s capital market required a stable macro-economic environment, strong legal and regulatory framework to protect property rights, good corporate governance as well as strong financial infrastructural development adding that the capital market has a key role to play in helping to finance domestic borrowing plans.

“We need the capital market for the mobilisation of finance. And to mobilise that finance, there is the need for enforcement of rules and regulations which are the bedrock of capital investment,” he said.

He noted the need for the review of existing laws such as the Investment and Securities Act 1999 to boost the potentials of the capital market.

In his address, Senate President, Bukola Saraki said economic reform bills that would make Nigeria investors’ friendly were already at critical stages in the Senate.

He listed such bills to include: Independent Warehouse Regulatory Agency Bill, Secured Transactions in Movable Assets Bill, Franchising Bill, Companies and Allied Matters Act (Amendment) Bill, Nigerian Ports and Harbours Authority Bill and Nigerian Railway Authority Bill.

“I hope that when you leave here at the end of the two days, what I will like to see is a working document with a clear timetable, listing the draft bills that you want us to pass.

“The eight National Assembly understands the issue that Nigeria is going through. And I can assure you to give us those bills, we will turn them around and pass them as soon as possible,” he stated.

The concern for the revival of capital market followed the reported loss of N1.63 trillion in January this year due to profit-taking and currency volatility.

The drop was said to have represented 16.50 percent bringing investment down to N8.225 trillion from the N9.850 trillion in December.

Also speaking, Speaker of the House of Representatives, Hon. Yakubu Dogara, said the lower house was in the process of tightening regulations in the stock market to ensure that investments are secured from fraud.
He said this move had become imperative because the nation is in dire need of investors who will bring in their resources to diversity its sources of income.

His words: “We strongly believe that the Capital Market is a major tool for wealth creation and mobilisation of funds to grow and diversify the Nigerian economy. We want to emphasise that any proposed legislation must find a way to protect ordinary Nigerians, some of whom have invested their life savings in the market from fraudulent market players. Many Nigerians have tales of woes from the irresponsible activities of these unscrupulous stakeholders in the market. The recent regulatory sanctions to some stock brokers and market players is, therefore, a step in the right direction,” he said.

He added that the capital market offered the impetus to diversify the economy by opening fresh vistas and windows for investment as he expressed confidence that the capital market could fill this gap by taking the lead in yielding opportunities that will help in revamping Nigeria’s economy.

He said the House of Representatives would contribute its quota “to arrest this dangerous drift,” adding: “Considering Nigeria’s population, human and material resources, our Capital Market could do much better in terms of depth, breadth, size, liquidity and access to investment opportunities.”

He added: “As major stakeholders in the Nigerian-project, the National Assembly, strongly believes that a pro-active engagement and collaboration between the legislature, the executive and the Organised Private Sector, will help to achieve the economic potentials of Nigeria’s Capital Market. It is indisputable that continued collaboration and buy-in of major stakeholders in the Public and Private sectors is one of the major ways of attaining the lofty ideals and salient objectives of the Nigerian Capital Market Master Plan.”

In his submission, the President of National Council of the Nigerian Stock Exchange (NSE), Aigboje Aig-Imuokhuede, called for inclusive economic growth and promotion of a national savings culture.

He said investors usually invested based on facts, noting that a situation where the enabling environment does not suggest certainty in terms of the application of financial realities and principles, creates uncertainty and volatility in the market.