Nigeria's SEC says legislative frameworks to boost investors' confidence

The Securities and Exchange Commission (SEC) of Nigeria is forging ahead with ongoing legislative frameworks aimed at bolstering the Nigerian Exchange and enhancing the market to increase investors' confidence. In an exclusive interview with CNBC Africa, Mr. Yuguda, the representative from SEC, highlighted the positive response of the Collective Investment Scheme (CIS) to these advancements, urging investors to leverage the CIS platform for managing their investments. Yuguda acknowledged the significant growth of the market from the previous year to the current one, attributing it to the responsiveness of the market to new economic policies in Nigeria. One crucial policy he emphasized was the removal of fuel subsidies, which acted as a substantial stimulus to the fiscal aspect of the economy. Additionally, the unification of exchange rates was noted as another pivotal policy that garnered investors' confidence. The singular price for foreign exchange and the elimination of fuel subsidies are projected to lead to a decrease in the government deficit, particularly in the medium to long term. This reduction in the fiscal deficit is anticipated to alleviate the crowding out of the private sector, paving the way for a more favorable business environment. Yuguda expressed optimism about the brightening business landscape, indicating that as the environment improves, individuals and entities are likely to make different and more informed financial decisions compared to a gloomier setting. He highlighted the heightened interest of local investors in the Nigerian market over the past year and the government's focus on enhancing Foreign Portfolio Investments (FPIs) and Foreign Direct Investments (FDIs). Additionally, the emphasis on pension funds as a means to deepen the market was underscored. When queried about the regulatory standpoint and strategies to attract more private investors and new players into the market in the short term, Yuguda emphasized the commission's commitment to formulating regulations that inspire confidence among both local and foreign investors. He outlined some of the regulatory initiatives undertaken, including the policy on the custody of all CIS products in the market. This move has resulted in substantial growth in assets under management within the CIS sector. Private investors are encouraged to channel their investments through the CIS platform, benefitting from the expertise of seasoned portfolio managers who can adeptly navigate market fluctuations and optimize their investments. In a bid to attract foreign investors, Yuguda highlighted the supportive foreign exchange policies of the Central Bank and the positive impact of the government's fiscal policies. He observed a renewed interest among pension funds in the equity market, signaling a shift from the previous inclination towards fixed income investments. This transformation in perception is anticipated to augur well for the capital market and the overall economy, indicating a positive trajectory for market expansion and investor participation.