A Professor of the Capital Market, Uche Uwaleke has urged the federal government to leverage the capital market to fund its capital projects.
Uwaleke gave the advice at the Colloquium and Book Launch Wednesday in Abuja.
Available data states Nigeria needs about $3 trillion to bridge its infrastructure gap.
The first professor of the capital market in Nigeria said it is important that the government look in the direction of the capital market for the much needed funds.
“And I am happy to note that the National Development Plan (NDP) puts a lot of weight on the private Sector in terms of financing infrastructure. We understand that about 30 per cent of the size of the NDP will be borne largely by the Private sector,” he said.
While acknowledging improvement in the regulatory environment, Uwaleke said, there is need to further strengthen and support the apex regulator, the Securities and Exchange Commission.
According to him, the support should be in the form of adequately funding the SEC to enable it carry out its mandate effectively.
“We know that the Apex regulator relies on funds from the market and there is a limit to which you can push the apex regulator to rely on funds coming from the market otherwise it becomes counter-productive. You discourage investments, you discourage issuance and you also discourage a demand for securities, at the end of the day, you now lose.
“The FIRS should also support all efforts in ensuring that fiscal incentives are used to incentivize the capital market, they should support that. In Jordan for example, if you get listed on an Exchange, part of the cost of listing is made tax exempt for you. It’s also possible to say, if you are listed, the first one year, it is possible exempt you from paying tax.
“Another option to also consider is to have a differentiated tax regime that favours listed companies. For example, we know that CIT for large companies is 30 per cent, we can say for example, let listed companies pay 29 per cent, it is a way to encourage them and the government will not loss revenue, you know why, because the more listings we have, the more companies that are more transparent and are less susceptible to tax evasion and avoidance.
It is on record that the bulk of the taxes that this country receives today are from listed companies, that is 50 per cent of CIT that FIRS collects from listed companies. So, the more companies that are listed there, the more money the government collects.
“It’s important we incentivise listing by reducing the monies that are paid by listed companies. Going forward, the government should take some of these issues into consideration. We saw that when MTN made issuance, we saw that it was oversubscribed,” he said.
He also called on the National Assembly to remove certain agencies from the list of those that are expected to remit their operating surplus.
“I also think, certain agencies that are critical should be exempted from such omnibus laws, if you like, one of which is the SEC, to ensure that it is adequately funded, so that the bulk of funding is not shifted to the market,” he said.
