By Tony Obiechina, Abuja
The Association of Capital Market Academics of Nigeria (ACMAN) has commended the administration of President Bola Tinubu for recognizing the capital market as a major pillar in its economic blueprint as contained in the President’s Policy Advisory
The President of ACMAN, Prof Uche Uwaleke gave the commendation a world press conference held in Abuja on Wednesday to assess the key policy measures rolled out by Tinubu in the first 100 days in office.
According to the erudite academic, the event was put together with a view to offering suggestions regarding the effective implementation of these policies.
ACMAN is the umbrella body of Lecturers and Researchers in the Nigerian University System and the financial market Industry committed to the development of the Nigerian capital market through teaching, research and advocacy.
Uwaleke pointed out that the twin policies designed to end fuel subsidy and unify multiple exchange rates, which defined the administration’s first 100 days in office have been welcomed by both domestic and foreign investors and has boosted boost confidence in the economy.
According to the varsity don, no where has this confidence manifested better than the stock market where the benchmark index (NGX ASI) hit the highest level ever in the history of the Nigerian stock market with over 68,000 points with year-to-date return now above 30 percent.
However, he stated that these reforms have left in their wake unpalatable outcomes which have made life more difficult especially for the ordinary Nigerian.
He said the twin policies designed to end fuel subsidy and unify multiple exchange rates, which defined the administration’s first 100 days in office have been welcomed by both domestic and foreign investors and has boosted boost confidence in the economy.
According to the varsity don, no where has this confidence manifested better than the stock market where the benchmark index (NGX ASI) hit the highest level ever in the history of the Nigerian stock market with over 68,000 points with year-to-date return now above 30 percent.
The Association advised the President to move speedily to ameliorate the pains brought on vulnerable Nigerians on account of the sudden removal of fuel subsidy.
This, it noted, should include scaling up the interventions in MSMEs and Agriculture as the current size of the total package is very small, at less than N1trn.
Uwaleke said, “We are convinced that more money can be made available to cushion the negative impact of fuel subsidy removal from reducing cost of governance, plugging revenue leakages and tackling the challenge of crude oil theft.
“Take for example, a recent OPEC report puts the country’s crude oil output at 1.2mbpd indicating huge volume deficit of circa 500,000mbpd compared to the 2023 budget target of 1.69mbpd and the OPEC quota of 1.74mbpd.
“At a conservative crude oil price of USD85 per barrel, the loss to Nigeria in one month is over $1 billion. We believe that swiftly dealing with the menace of crude oil theft will put the FG in a stronger position to scale up compensation measures including the implementation of a new minimum wage for workers as well as the programme on food security expected to drive down prices.
“ACMAN commends a number of actions taken by the President since assumption of office notable among which are the appointment of Mr Wale Edun as the Minister of Finance and Coordinating Minister for the Economy. Mr Edun’s rich capital market background puts him in good stead to leverage the potentials of the market to facilitate the country’s economic development.
“Other laudable actions of the President worthy of mention include the issue of four Executive Orders to suspend certain fiscal policies contained in the Finance Act 2023, the setting up of the Presidential Committee on Fiscal Policy and Tax Reforms as well as the unveiling of his eight-point agenda.
“ACMAN has followed with interest the recent engagements by the President with international investors during his recent visits to India and the UAE. We are excited by their prospects and hope the pledges made by these investors materialize in view of their potential long-term positive impact on external reserves, forex liquidity and job opportunities.
“To this end, the government must walk the talk regarding aspects of its eight-point agenda to do with security, rule of law and anti-corruption.
“ACMAN is concerned that the forex market has remained illiquid and volatility in exchange rates has persisted despite the naira float policy that followed the unification of exchange rates. To make matters worse, the parallel premium has continued to widen seemingly defeating one of the objectives of the naira float.”
In view of the continued huge chunk of imports from China, Uwaleke said the Association is of the view that the CBN should revisit the currency swap arrangement with China to a scale that reduces significantly the dependence on US dollars for imports from China. READ ALSO:
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He added, “The government should give support to the CBN in the implementation of the RT 200 programme especially in relation to port reforms while it works on the ease of doing business to pave way for increased foreign investments.
“We believe that unlocking value in dead assets is one way to improve the country’s fiscal liquidity. We encourage the new administration to speed up the process of privatizing government enterprises, including the NNPCL, not by selling to a few individuals or companies but through the capital market for transparency and inclusiveness as well as explore asset securitization as a means of financing developmental projects.
On the recent memo by FTSE Russell, in which the Subsidiary of the London Stock Exchange (LSE) disclosed its reclassification of the Nigerian stock market index from Frontier to Unclassified market status citing difficulty by international institutional investors to repatriate capital from Nigeria, ACMAN described the move as a premature on the part of FTSE Russell, which has not allowed sufficient time for the forex reforms introduced by the government to mature.
