The Lagos Chamber of Commerce and Industry, LCCI has described cost of funds in Nigeria’s money market as too high to support entrepreneurship and canvassed the need for the utilization of pension fund savings as an alternative, investment-friendly capital source for businesses in the country.
Making the position of the organized private sector (OPS) group known when he led a delegation of the Chamber on a courtesy visit to the Nigerian Stock Exchange, (NSE) in Lagos, the President Babatunde Ruwase, noted that there was the need to strengthen collaboration between LCCI and NSE, especially to improve private sector’s contributions to the nation’s economy.
Specifically, he identified the urgent need to mobilize capital for investors, especially the indigenous ones, as one of the key areas the collaboration could be targeted.
Ruwase said: “As you very well know, the costs of fund in money market as well as tenure of funds are not in tune with the yearning of investors, especially those with a long term perspective. This has constrained the growth of key sectors including agriculture, manufacturing, property, construction, infrastructure etc. All these sectors need affordable long term funds.
“The Capital Market window naturally provides the good option for funding of such investments. We would like to see a better impact of this funding window. There is also need to collectively strengthen advocacy to make pension funds available for long term financing needs of the economy”, he added.
Expatiating further on the potential benefits of the LCCI-NSE collaboration, he explained that “monetary, fiscal and trade policies have significant impact on the performance of the stock market and private sector investments generally. It will be useful for us to collaborate to promote investment-friendly policies in the economy through regular engagements with the relevant authorities of government. We need to attract more private capital [domestic and foreign] into this economy, especially now that it is obvious that the government does not have the financial resources to fix the economy.
“There are several other areas in which we can collaborate especially in sharing information. It is our hope that this interaction will occur more frequently so that together we can deliberate on response strategies to emerging challenges in the economy”, the LCCI President added.
On the implications of the partnership for SMEs financing, the industrialist pointed out that as in many other economies, SMEs are critical to economic development, especially the creation of jobs and the promotion of inclusiveness in the Nigerian economy.
He lamented that funding SMEs remained a major challenge in our economy as it had been difficult to unlock the potential in the sector partly as result of the problem of inadequate funding of the sub-sector.
While expressing serious concern over the deterioration of values of trust and integrity in business practices in the country, the LCCI leader explained that promotion of good corporate governance and scaling up of business ethics would help in reversing the ugly trend in the economy