In a bid to solve the challenges associated with insufficient funds in running economies across Africa, Karim Haiji the newly elected president of the African Securities Exchanges Association has called on African presidents to consider listing government owned companies on their various exchanges to drive liquidity and overall continental growth.
According to him, listing such companies will ensure that funds are generated from the companies and mobilised to other sectors in dire need of government funds such as power generation, education and health.
Haiji stated this on Monday at the opening ceremony of the 22nd African Securities Exchanges Association (ASEA) annual general meeting and conference organised by Nigerian Stock Exchange (NSE) in Lagos.
“For companies owned by government across sectors such as oil and gas, transportation, mining, telecoms etc, that do not have the best interest or perform poorly financially, government must have an interest in considering stock exchanges to sell their stakes to the public,” said Haiji who is also the CEO of the Casablanca Stock Exchange.
Highlighting the importance of listing these companies on the exchanges, Haiji pointed out that government’s preference for selling their stakes in companies to strategic investors, instead of listing them on African exchanges hampers the much needed liquidity African economies crave for sustenance.
He said: “By listing these companies on African exchanges, you create liquidity, you provide investment opportunities for retirees and you provide jobs for the youths, because we create more wealth as these companies develop.”
Speaking to the theme:“Champions On The Rise: Africa’s Ascension To A More Sustainable Future” and declaring open the conference, Yemi Osinbajo, Nigeria’s vice president said that it is evident that ASEA has a key role in the nation’s quest for economic growth and development.
“This is not only because of the vital role that capital markets plays in our domestic economy, but because the association reflects the right place of collaboration and partnership required of African countries and economic institutions to bring about a more vibrant and dynamic continental economy.”
He stated that the Federal Government is working with African Development Bank (AfDB) to establish a 500-million-dollar innovation fund for technological growth.
Adding that the fund was aimed at increasing the competitiveness of Nigeria’s Information and Communications Technology (ICT) industry.
“Given the size of our economy and the potential of technology and creative segment, I am hopeful that capital market operators will work toward innovative financing solutions to lend further support to these sectors,” the VP said.
Osinbajo also said that the Central Bank of Nigeria (CBN) would soon issue licence for payment service banks, which would increase access to financial services, low income earners and the unbanked.
He noted that the partnership was also essentially to ensure that African champions continued to rise in a sustainable manner as past pathways to economic growth that deplete the environment’s resources may no longer be easy to replicate as a path of evolvement that worked for developed economies.
Nigeria’s minister of finance, Zainab Ahmed, urged ASEA to develop a strong and vibrant domestic investors’ base.
Ahmed, who was represented by Mary Uduk, acting director-general of Securities and Exchange Commission (SEC) said that low domestic investors’ base was limiting African capital markets.
She said that the capital market size of Africa was very low, thereby limiting market potential, noting that ASEA must promote world-class capital market, characterised by high level of liquidity.
The annual ASEA Conference is a flagship event for Africa’s capital markets bringing together CEOs of exchanges and capital market operators, policymakers, regulators, senior government officials, industry experts and investors, from Africa and beyond.