Nigeria’s Securities and Exchange Commission educates, partners Nollywood film

Nigerian regulator, the Securities & Exchange Commission, is travelling the country to build education and awareness. Internationally it also is working hard to restore confidence in the capital markets, as regulation tightens since 2009.
SEC Director General Arunma Oteh, SEC Commissioners and senior officials visited Port Harcourt, capital of Rivers State, for 4 days of meetings with stakeholder groups such as business, civil servants, legislators, teachers and students.
Oteh challenged Nigeria’s state governments and corporates to seek long-term funds from the market to finance development projects, rather than using short-term financing. Short-term funds for long-term projects, she warned, would amount to a mismatch, with negative consequences and high default risk if, for instance, interest rates continued to rise.
Oteh said that no nation can develop without long-term capital and this was the “reason why governments make concerted effort to promote the market and ensure its stability as an integral part of the financial sector development.”
The SEC organized a 3-day investor/issuer education programme, themed: “The role of the capital market in mobilising funds for business expansion and infrastructure development.” Senior officials from the Nigerian Stock Exchange were present too, to encourage more companies to become listed on the NSE.
The SEC has also launched a partnership with Nigeria’s film industry (“Nollywood”), on using film to spread the word widely about capital markets and investing. According to a report of the SEC campaign in Daily Independent newspaper, the first fruit of the partnership was “Breeze,” a comedy/drama, which according to Kunle Afolayan, the producer/director, premiered on 19 July and teaches the essence of saving for the future.
Oteh explained the partnership with Nollywood was a good way to reach all strata of the Nigerian society. The SEC said “the capital market is key to transforming our society, because no nation has grown without its people saving to educate their children and to transform the country.”
She also said that the SEC is poised for more collaborations with Nollywood in the light of lack of share knowledge, significantly growing number of investors from only 4.5 million or 3% of the population (compared with 60% of U.S. households that invest in the capital market).
Collective investment schemes (CIS) are also on the rise. Oteh said there was an opportunity to pool funds for investment in infrastructure and the SME sector. Olumide Oyetan, CEO of Stanbic IBTC Asset Management Limited, was reported as saying CIS are not much used in Africa, unlike in the US where only 10% of individuals invest directly, and the majority through mutual funds and this is partly because of “poor awareness and low financial literacy amongst retail investors (less than 100,000 people use CIS in Nigeria); limited options available amongst operators and asset classes; aggressive return expectations from investors; safety of investment concerns since the global crisis; prevalence of unregistered and unregulated quacks.”
The Rivers State government is hoping to issue a N100 billion bond targeted at replacing the decaying infrastructure, helping to diversify from oil and preparing for the challenges ahead as first tranche of a N250 bn state issuance programme.

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