By Chukwuma Umeorah
The Securities and Exchange Commission (SEC) has urged increased utilization of the capital market for financing Nigeria’s infrastructure needs. The Commission emphasized this beyond serving as a sustainable alternative to external borrowing, it would improve the vibrancy of the market in achieving the Federal Government’s $1 trillion economy target.
Speaking at the 2024 SEC Journalists Academy in Lagos on Tuesday, the SEC Director-General, Emomotimi Agama, emphasized the potential of innovative funding instruments like sovereign bonds, Sukuk, and green bonds to address critical infrastructure deficits. He highlighted the success of previous initiatives, such as the Federal Government’s six Sukuk issuances, which financed road projects across all six geopolitical zones.
“Nigeria has already demonstrated how the capital market can fund these needs through innovative instruments like sovereign bonds and a number of Sukuk,” Agama said. He further explained that this approach not only reduces reliance on costly foreign loans but also drives economic activities, including job creation and regional integration.
Agama pointed to the issuance of green bonds as a dual solution addressing environmental challenges and infrastructure development. “The issuance of green bonds has further cemented the role of the capital market in supporting Nigeria’s transition to a low-carbon economy, addressing both infrastructure and environmental sustainability,” he noted.
Speaking on the theme: “The Role of the Capital Market in Driving Nigeria’s $1 Trillion Economy, he said the journey demanded collective effort. He noted that “Achieving a N1 trillion economy is not merely an aspirational goal; it is a necessity for the prosperity and resilience of Nigeria. The capital market, as the financial backbone of our economy, is poised to drive this transformation.”
State governments were also encouraged to leverage the capital market for financing key projects. Agama cited examples of sub-nationals like Lagos and Ogun states, which have used bond issuances to fund infrastructure, education, and healthcare projects. He stressed that expanding this model to other states, alongside public-private partnerships, could unlock development on an unprecedented scale.
“These bonds not only enable states to execute developmental projects but also foster accountability and transparency, as market discipline demands robust reporting and monitoring mechanisms,” Agama said.
Despite these successes, Agama acknowledged challenges, including limited investor participation and regulatory bottlenecks, that must be addressed to fully realize the market’s potential in financing Nigeria’s economic transformation.
Agama reiterated the need for collective efforts among stakeholders, including market operators, policymakers, and journalists, to amplify the capital market’s role in national development. He urged journalists to shape narratives that inspire public trust and participation, especially in infrastructure financing. “Together, we can move toward a more inclusive, dynamic, and prosperous Nigeria,” he concluded.