The Federal Government, yesterday, revealed plans to set up a $25 billion infrastructure fund to bridge the funding gap in infrastructure development in the country.
The Minister of Finance, Mrs Kemi Adeosun, made the disclosure at the inauguration of the 10-year Capital Market Master Plan, Nigeria Investor Protection Fund (NIPF), and the launch of the Corporate Governance Scorecard for quoted companies by the Securities and Exchange Commission (SEC) in Lagos.
According to her, setting up the fund became necessary due to the need to upgrade the country’s current infrastructure. She, therefore, urged the capital market community to come up with other innovative ways of mobilizing capital needed to address the nation’s infrastructure problem.
“In the current environment of significant revenue squeeze and other budgetary constraints, these investments will clearly not come from government coffers alone. We believe this is where the capital market can really make itself relevant by stepping in to close the funding gap.
“Government is already looking to set up a $25 billion fund wholly dedicated to infrastructure investments. A crucial assignment we have for the capital market community is to come up with other innovative ways of mobilizing the capital needed to address Nigeria’s infrastructure challenge,” she said.
Adeosun, who was represented by the Permanent Secretary, Ministry of Finance, Dr. Mahmoud Isa-Dutse, said an efficient and vibrant capital market is an indispensable feature of any modern economy supplying affordable medium-to-long term capital needed for growth. This is because they facilitate mobilization of savings, accelerate capital formation, provide investment avenues and enhance efficient allocation of capital to the growth of sectors as no country has been able to develop without a thriving capital market.
“Nigeria needs and deserves a capital market that is characterized by high levels of liquidity, depth, breadth and sophistication to enable rapid socio-economic development. Going through the Master Plan, it is heart-warming to note that this is the type of capital market you envision for our country and indeed, we desperately need such a market to emerge in order to tackle Nigeria’s biggest challenge of huge infrastructure deficit and unacceptable level of unemployment. As you all know, to grow our economy, we require significant funds to modernize our critical infrastructure,” Adeosun added.
She expressed worry that less than three percent of Nigerians currently invest in the capital market and worse still, only 0.2 percent of Nigerians invest in mutual funds.
“Imagine the kind of savings to be mobilized, the liquidity to be injected and the sophistication to be developed if we improve these numbers by bringing more millions Nigerians to invest in the capital market. For Nigerians of faith and people who prefer ethical investments, we must deepen the non-interest product space so they can be involved in wealth creation opportunities the capital market offers.
“For a country and economy of our size, there is no reason why we should not be able to actualize the targets and aspirations we have set for ourselves within the Master Plan. Indeed, with diligent implementation, we shall emerge as ‘Africa’s most modern, efficient and internationally competitive capital market that catalyzes Nigeria’s emergence as a top 20 global economy,” she said.