Chinwendu Obienyi

The Group Managing Director, Afrinvest West Africa, Ike Chioke,  has said that the capital market remains at the centre of mobilising funding for key infrastructural projects in the country. 

Chioke made this assertion on his assumption of office as the new President of the Association of Issuing Houses of Nigeria (AIHN) in Lagos yesterday. Delivering a speech at the 2020 Investment Banking Awards, he noted that Nigeria is now at crossroads in its quest for development and with all that has happened with the COVID-19 pandemic, which resulted in a GDP contraction of 6 per cent in the second quarter, adding that another contraction was expected in the third quarter of 2020 which technically means that the nation’s economy is in a recession.

He explained that with the country’s population still growing at 3 per cent per annum, coupled with the challenges of infrastructure and low investment in the banking industry, there seems to be a disconnect from capital formation in Nigeria.

Related News

According to him, only five companies have come to equity market to raise capital in the last five years.

“Presently, a lot of companies are doing a lot of debt capital-raising because of the low yields which is helpful for the companies but bad for investors because investors’ are having to place their money for 5-7 years which is well below inflation.

Nigeria will need to spend something like $25 billion every year or over the next ten years to catch up on its infrastructural deficit and one way the capital market can help is to articulate or organise a N1 trillion infrastructure fund which is designed to raise money for well packaged and structured infrastructure projects which might be in form of corporate entities that benefit the economy, presented by state governments  or indeed the Federal Government because this will lead to solving the mutual problem both sides have”, he said.