CIS surpasses N3 trillion in 2024, says SEC

By Chukwuma Umeorah

The Securities and Exchange Commission (SEC) has announced that Collective Investment Schemes (CIS) in Nigeria exceeded N3 trillion in 2024, reflecting significant growth in this segment of the capital market.

The Director-General of the SEC, Emomotimi Agama, made this disclosure during a media briefing in Abuja, emphasising the importance of CIS as a tool for risk diversification and simplified investment for Nigerians. “In the collective investment schemes, you get a bucket of shares and ask people to invest. Therefore, if you are investing through a collective investment scheme, you probably will be investing in 10 companies via one route, as different from going to invest directly in any company,” Agama explained.

He added, “It reduces your risk, it diversifies your potential, and of course takes care of the ups and downs in the market whenever they exist. It is, for us, a very good area for Nigerians to invest in because when you do not understand it, do not go into it. With a collective investment scheme, you do not need to understand it because someone is there to understand it for you and invest on your behalf, understanding the vagaries of the market, its dynamics, and how it runs.”

Beyond CIS, the SEC DG highlighted the pivotal role of the capital market in supporting the economy, particularly through the recapitalisation exercise mandated for banks by the Central Bank of Nigeria (CBN).

“As you are all aware, the banks are a very important element in our development and economic sphere. Last year, 2024, the Central Bank came up with a regulation to increase capital for all banks. Many people thought it was too daunting a task for the capital market. However, where else will the banks, who already loan money short-term, get money from, other than the capital market?”

Agama further noted that the capital market had facilitated the raising of over N2 trillion for banks, stating, “For all of the issuances that happened in the market last year, we were able to raise more than N2 trillion, precisely about N2.2 trillion for the banks, which means the capital market is actually the element that helps to galvanise growth and development.”

He revealed that beyond banks, other institutions also leveraged the capital market for funding, alongside numerous government bond issuances aimed at financing infrastructure. Agama underscored the importance of infrastructure to economic growth, emphasising that the capital market remained the only viable source of long-term funding for such projects.

“And the only place you can get long-term capital for infrastructural development is the capital market. There has always been this mistake of people going to the money market to loan money that will be used for long-term projects. It is a recipe for failure. The only place you can get that kind of money you need for long-term projection that you need in achieving the goals of government, the goals of the institution, is the capital market,” he said.

Agama outlined efforts by the SEC to streamline processes and make the capital market more attractive to Nigerians. He revealed that approvals for raising capital now took about 14 days, compared to previous timelines of up to two years.

“We are using technology to be able to achieve this, and that is why we have what is called the E-offering platforms, which allow Nigerians, with the aid of their phones, to be able to make investments without necessarily going to any bank or any other place to do so. For us, we are very confident that the things we have put in place in the capital market in the last nine months since we assumed office have actually transformed the market. This is just the beginning, and there is so much to be done.”

He also expressed optimism about the pending presidential assent to the Investments and Securities Bill 2024, which he described as a transformative piece of legislation poised to enhance market regulation and development.

“That bill is robust; it contains everything on market regulation and development you can ever imagine in the current time and looking into the future. Therefore, we believe strongly that with the conclusion of that process with the National Assembly, it will be sent to Mr. President for assent. We are confident that the President will give his assent because it is actually a vehicle for development for this nation. We want to mainstream the capital market into national development,” Agama concluded.