The Nigerian Exchange Limited (NGX) has advocated that the Federal Government and the Central Bank of Nigeria (CBN) should accord priority to listed corporates in their procurement processes and access to foreign exchange (FX).
Temi Popoola, the Chief Executive Officer of NGX made the call at the MTN Capital Markets Day in Lagos.
This strategic approach, according to Popoola, is pivotal in attracting more companies to list on the Exchange and mitigating the prevalent FX challenges in the economy.
He pointed out that NGX is excited with the new change in administration and its renewed hope agenda as it presents an opportunity to work with market stakeholders, including the regulators to address the challenges faced by the government and listed corporates.
What Popoola said
Popoola stated that the Exchange was working with government to use the capital market to fix government problems of which enabling the execution of dollar-denominated transactions on NGX can address forex illiquidity.
- He said, “There are companies that would like to list on our Exchange, but they earn in dollars, their revenue to their bottom-line is in dollars.
- There are also listed companies that would like to pay their dividends in dollars. However, the current regulation does not allow that.
- “We are working with regulators and policymakers to try to address that because this would create a lot more benefit to the government who is looking for FX resolutions to their challenges.
- We believe this will also unlock the dollars that people have saved in domiciliary accounts to be put into useful work in the capital market and economy”, he explained.
In addition, the NGX CEO disclosed ongoing discussions with the Federal Government to attract listings through supportive legislation.
He argued that increased listings would boost government revenue, citing the transparency, higher tax contributions, and better governance exhibited by listed companies.
Popoola highlighted the historical role of government support in facilitating the presence of many companies currently listed on the Exchange.
No Mr Popoola, we want a free market system as much as possible – no more market segmentation or treating some as favourites and others as pariahs…..it will lead to market & price distortions….and unfair market dynamics….
Free market is impossible, we must protect our national companies. And what should be done is for Africa to trade with its local currencies, for example if I import something from Ghana it should be with its currency not with dollars.