Mr. Oscar Onyema, the group chief executive officer (GCEO) at the Nigerian Exchange has said Nigeria’s green bond market has a good yield curve.
He said this during a panel session focused on mobilizing financial capital during the Africa Investment Forum (AIF) held in Abidjan, Cote d’Ivoire from November 2 to 4, 2022.
According to Onyema, the Nigerian Exchange (NGX) Group has issued two sovereign green bonds and Access Bank has also issued a green bond to provide a war chest that is dedicated towards climate project financing.
Onyema also mentioned that North South Power Company Limited has issued a green bond, to support their energy transition programs around providing power to Nigeria.
In his statements, the NGX GCEO said the exchange has had a good yield curve and is working with several other green bond issuers for new rounds, including sovereign bonds.
Room for improvement: Onyema told attendees he thinks a lot can be done in sustainable financing space. According to him, a lot of education still needs to be carried out to teach people why it is important to invest in green bonds. He said green bonds were issued to finance climate projects and to allow private sector firms to show interest in green bonds.
Tapping into global financial flows: According to Onyema, Nigeria has partnered with the Luxembourg Stock Exchange (LuxSE) to carry out dual listings of green bonds because they are the largest green bond market in the world. Onyema said: “Globally, there is increased funding for green projects; it is not the same locally, so we are trying to plug into the global financial flows. The Access Bank green bond, for example, is listed on both exchanges.”
Opportunity for growth: While speaking on the panel, Onyema said: “If you look at the global equity market capitalization, it is worth about $122 trillion. Meanwhile, if you look at all the stock exchanges in Africa, covering 38 countries, the total equity market cap is $2 trillion. So, it’s a very small percentage of what is going on globally. However, there is significant opportunity for growth, especially due to recent structural changes and policies.
Potential for financing arrangements: According to the African Development Bank (AfDB) Group, a key stakeholder at the AIF, Oscar Onyema sees the potential for more financing arrangements inside and beyond Africa, ranging from philanthropic institutions to stock exchange investments.
- North South Power Company Limited (NSPCL) is a pan-African generation company with a diverse and emerging portfolio focused on electricity generation.
- As of 2019, NSPCL was responsible for 8% of Nigeria’s power generation. The company issued an N8.5 billion green bond in 2019.
- The Africa Investment Forum 2022 is an innovative investment market bringing together African leaders and government heads on the one hand, and project promoters, private and public investors, capital investment companies, philanthropists, and sovereign funds on the other.
The layers of approvals is scaring issuers from the Green bond space
There is absence of viable secondary market opportunities on NGX
Bonds are not traded in bid and offers format
The market has boxed NGX out of the bond market as a result of it’s inefficiencies
Now hiding under MoUs with foreign exchanges to curry patronages via dual listings
It is shambolic to trade FGN bonds on NGX. The numbers are too pathetic when compared with FMDQ
Government should save cost and remove it’s bonds from NGX to FMDQ
The secondary market numbers are my evidence.i stand to be corrected.
Floppy disk product i e. No impact
Will somebody tell this man to stop exposing his mismanagement and below average understanding of the nation’s capital market each time he opens his mouth. How many bonds had been listed so far this year. Corporate bonds do not have secondary market trading. Even NGX has become the weakest link isecondary market trading of FGN bonds. Government should save cost by only listing it’s bonds on FMDQ. For over ten years, he was unable to institute bid offer pricing for bonds yet waste over N1billion on derivatives and ETF that are still struggling. Where the CEO of the exchange is also the largest incestor in the market claiming he is doing it under blind. Thrust. Is that not massive and monumental corruption. You see why even dividends announcements do not impact price movements when exchange management are the largest investors in the market and engage in over invoicing, sack staff at will without paying appropriate and living exit allowances, procurement of bank facilities in the name of NGX for personal benefits, cashing out of the exchange, resource wastages among other vices