The world over, the use of technology is non negotiable. And in Nigeria, FinTechs are making serious inroad in the economy as they continue to drive growth in the non-oil sector. In this interview, with BENJAMIN UMUTEME, Emomotimi Agama, stressed the importance of supporting FinTechs as they are the future of any economy. He spoke on other issues in the capital market.
As it seems, FinTechs are driving growth in the non-oil sector. How can Nigeria leverage on it to further boost the economy?
The fact is that FinTech is the new gold. As such, the government must begin to focus on creating some incentive, especially making deliberate efforts towards helping FinTechs grow. And by that, what do I mean? FinTech is actually an access to the development of virtually every sector. So, if the government realises this and encourages the deployment of FinTechs in all of the sectors that have been experiencing zero growth, there will be a continuous movement in those areas as we boost the economy. Clearly, the government has a strong role to play and the government must appreciate the value of FinTech in the development of the economy. When you talk about FinTech, you are talking about technology. Everything that leads to development today is about technology. The level of appreciation and mainstreaming of technology to the Nigerian economy will actually be a panacea to the challenges we are experiencing today across the nation. It can be a major tool to combat insecurity in Nigeria today through technology, not necessarily through financial technology.
You are looking at finance and how technology can boost it. Wealth creation, access management, corporate investment advisory. All these are ways by which FiTechs can actually boost Nigerian economy. At the SEC, we have encouraged that and we have done so much in that light that is why we have a FinTech roadmap. That is why we have the committee working on blockchain or virtual financial assets in 2020. And that is why we also released in September, this year, the classification of FinTechs or digital assets providing clarification. And that is why most recently, we issued a rule on crowdfunding. Crowdfunding is a solution that helps medium and small scale enterprises to raise capital from the market; and I am sure you are aware that 34 per cent of companies in Nigeria are MSMEs, and of course, you know that 84 per cent employment in the country is done by MSMEs. The major challenge of these institutions is finance that is why the SEC went ahead to provide guidance by way of issuance of the role of crowdfunding to help MSMEs raise capital flawlessly in the Nigerian capital market.
With so many FinTech start-ups, there are fears, real or imagined, that regulating them might become a challenge to the SEC?
That is an imagination which is unfounded. Regulation will not be a challenge to the Commission because as the market is developing, the Commission is also developing. So, the Commission is employing various tools and are walking with various stakeholders to bring the market to full regulation. Hence, recently, as you can see we issued a circular asking Nigerians to desist from putting their funds in foreign securities. So, if regulation is to be a challenge, we won’t be doing that. And we have our reasons because our reasons are backed by law. That is what it is! So, there is no way that as the market is developing that the Commission is not also developing its staff and facilities to be able to regulate the market.
Talking about foreign securities, it brings the issue of cryptocurrencies. What is the level of talks with the CBN knowing that a lot of Nigerians have their monies in that market?
The truth about it is that as the DG has told you. If the DG at his level has told you, what more can anybody say. And if any update comes out the DG will inform everybody.
Globally, it’s about technology. What is the projection for the FinTech subsector of the market?
The sector is growing and it will continue to grow. Every economy that wants to improve, every economy that wants to match its contemporaries must embrace FinTech. So, the sector will continue to grow. It is important that people are aware that it is the driver of the future economy. Any economy that does not have FinTech at its back is in the dark ages.
Will the government’s pronouncement on the issue of unclaimed dividends not act as a disincentive for investors and investments in the market?
The Commission is in discussion with the authorities and am sure that a resolution will be provided. We are part of the government we can not go against the government. But if there are concerns of the people those concerns will be discussed. And because we are also part of government they will also listen to us because we want to allay the fears of investors that the Commission will always protect their interests.
Talking about commodity exchange, what should Nigerians be expecting?
The Commission has done so much by the establishment of a committee that released in 2019 the Commodity Ecotrading System Report. And that report basically has the interest of reviewing and actually diagnosing the challenges of the commodity ecosystem; and having done that, an implementation committee was set up subsequently, after the report was released. And that implementation committee has been working tirelessly with the Commission in dealing with the recommendations in that report. We can boldly say they are beginning to see traction. And because they are beginning to see traction, the commodity exchanges that were registered in Nigeria and more are still coming because agriculture is actually the bedrock of our development.
And once the small holder farmers are adequately protected, they can find solace in the regulation of the Capital market. Certainly the economy will be better for it. And recently, I am sure you are aware that in response to dealing with the challenges, the SEC released the warehousing and collateral management rule. That is also critical in the value chain of the commodity market space. So, we are complimenting, we are very very convinced that the way to go is to develop the commodities market, and by doing so, the economy will be diversified for us to meet the demand that the nation has imposed on us.
