UK Offers Support To Sustainable Development Of Nigerian Capital Market

The UK Government says Nigeria will benefit from the further development of its capital market to enable it contribute to the delivery of national economic goals, including the ambition to transition to clean energy solutions.

This it hopes to do under its Mobilising Institutional Capital Through Listed Product Structures (MOBILIST) programme even as the country needs an estimated US$10bn in financing per year to meet the Sustainable Development Goals (SDGs) by 2030.

At two MOBILIST events hosted by the Nigerian Exchange Limited (NGX) and the British Deputy High Commission (BDHC) in Lagos on Tuesday, the UK underlined its commitment to work with Nigeria to meet these goals.

The event brought together stakeholders from across the finance community, including representatives of the Securities and Exchange Commission (SEC) and pension fund industry, to discuss opportunities to solve some of the principal barriers to increasing investment in the SDGs via public markets.

This week’s events come after former UK Foreign Secretary James Cleverly announced a partnership between MOBILIST and NGX to catalyse greater investment in the SDGs via products listed on the exchange. Cleverly made the announcement in August last year during a visit to Nigeria and the NGX trading floor.

MOBILIST, the joint statement continued, offers equity capital as well as technical assistance to facilitate the listing of pioneering products that support the delivery of the SDGs. It also provides policy and research support to enhance the environment for issuers, investors, and intermediaries.

According to the Organisation for Economic Co-operation and Development (OECD), Africa needs to invest an additional USD 194 billion per year to meet the SDGs by 2030. Closing this financing gap cannot be achieved without mobilising private investment and enhanced collaboration among capital market actors, governmental institutions, and development finance institutions.

Speaking at the event, the British Deputy High Commissioner Jonny Baxter, said “the UK government is committed to supporting Nigeria in the continued development of its capital market to help deliver the country’s economic goals, including its ambitions to transition to clean energy solutions.

“A liquid and well-regulated capital market benefits the entire economy by enabling companies to raise capital to fund their expansion, which in turn helps deliver crucial development, job opportunities and improved incomes,” he added.

For him, “MOBILIST’s focus on stimulating the creation of innovative listed products can make a unique and impactful contribution to achieving these objectives.”

In his goodwill remarks, the Chairman, NGX, Ahonsi, Unuigbe, highlighted the need for addressing barriers hindering public listings through collaborative discussions, assuring that discussions at the event “are crucial as we address barriers hindering public listings and explore actionable solutions.

“By overcoming these obstacles, we can unlock the full potential of our capital market, enabling more businesses to access the funding they need to grow and thrive. Some of these obstacles are significant such as regulatory challenges, high listing costs, and market volatility,” he stressed.

Continuing, Ahonsi said “an enhanced and efficient listing process will democratise access to capital, nurturing a vibrant entrepreneurial ecosystem, particularly businesses dedicated to the achievement of Sustainable Development Goals (SDGs), can flourish.”

MOBILIST, according to Ross Ferguson, Programme Lead at the FCDO, “is the expression of the UK’s conviction that public markets have a leading role to play in financing sustainable development by mobilising private capital to flow where it is needed most – to firms tackling development challenges and the climate transition.

“We are committed to deepening our relationships in the Nigerian market as we seek to identify businesses and SDG-aligned assets that need our support.”

In his welcome address, acting Chief Executive of NGX, Jude Chiemeka, emphasized the impact of the partnership with MOBILIST, assuring that the partnership “is geared towards advancing market efficiency, sustainability reporting, and integrating Environmental, Social, and Governance (ESG) principles. This event represents a significant milestone in our ongoing efforts to enhance the performance and deepening of Nigeria’s capital market by promoting sustainable capital flows and enhancing listing diversity.

The discussions at the event, Chiemeka said “are poised to yield actionable insights on how we can collectively catalyse economic growth through the capital market. By harnessing the potential of our capital market, we can unlock new opportunities for funding businesses, fostering entrepreneurship, and ultimately driving sustainable development across Nigeria.”