By Tony Obiechina Abuja
The Senate Committee on Capital Markets and Institutions in collaboration with the Securities and Exchange Commission is set to hold a national stakeholders summit on Municipal Bonds and Sukuk for Local Government Infrastructural Development next month.
According to the Chairman, Senate Committee on Capital Market and Institutions, Senator Osita Izunaso, the summit themed “$1 Trillion Nigerian Economy: Infrastructure Financing through the Capital Market”, scheduled for September 29, in Uyo, will bring together key players from government, regulators, investors, and the private sector to explore how municipal bonds and Sukuk can unlock new funding for roads, healthcare, housing, water, education, and transport at the local government level.
These instruments Izunaso stated, offer sustainable, market-based alternatives to traditional funding and have been successfully deployed globally.
The Chairman stressed that empowering local governments through the capital market will reduce reliance on federal allocations, promote fiscal independence, create jobs, and accelerate Nigeria’s progress toward a $1 trillion economy.
Also commenting on the workshop, Director General of the Securities and Exchange Commission, Dr. Emomotimi Agama stated that Nigeria’s infrastructure gap demands capital market solutions like bonds and Sukuk which provide long-term funding with stable investor returns.
He said, “Infrastructural gap in Nigeria can be met effectively through Capital Market Funding adding that the summit is one of the ways to create awareness for stakeholders on some of the benefits of municipal bonds and sukuk among others”.
According to the SEC DG, bonds are essentially long-term debt instruments in any structured economy geared primarily to guarantee access to potential resources for the government or company’s infrastructure / developmental purposes and also provide an outlet for investors to enjoy stable returns.
Agama stated that the Nigerian bond market has become more popular as same is being embraced by Governments and corporate institutions to raise funds for crucial projects and business expansion/working capital requirements respectively.
“In view of the paucity of revenue to finance necessary developmental infrastructure and services in the country in recent times, the government at all levels need to take advantage of the opportunity available in the capital market through the issuance of bonds to access funds for developmental purposes” he stated.
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The summit’s primary goal is to explore how Nigeria can build a robust municipal bond and Sukuk market to support local government infrastructure.
By gathering key stakeholders from the public and private sectors, the summit will aim to: Educate stakeholders about the benefits and potential of municipal bonds and Sukuk as effective financing tools for local governments: Identify and address challenges faced by local governments in accessing capital markets for infrastructure financing.
The event also seeks to create a comprehensive strategy for developing a well-functioning municipal bond and Sukuk market in Nigeria that is adaptable to the country’s local government framework and Promote collaboration among government agencies, financial institutions, investors, and other market participants. This will help to create a sustainable financing ecosystem for local governments and provide actionable policy recommendations and regulatory reforms that would enable and facilitate the issuance of municipal bonds and sukuk by local government.
