…as brokerage community urges synergy between state spending and private capital
Olukayode Fayemi, the executive governor of Ekiti State has hinted on the possibility of offering the state’s tourism, health and knowledge assets for investment from the public through Nigerian Stock Exchange (NSE).
The governor was at the Exchange last weekend, for dual purposes, which were to make an investment case for Ekiti State, and to strengthen the bond of partnership between state and private capital, in his capacity as the Chairman of Nigerian Governors Forum (NGF).
Fayemi, while giving the facts behind Ekiti state’s economy, to the investing and brokerage community at the Exchange house, explained that, having raised funds from the NSE from as far back as 2001 for the development of the state, many of the projects completed from these funds, have succeeded in yielding economic growth, putting the people of the state in jobs and increased the people’s access to public utilities.
He however alluded to the fact that the state had lost some grounds in development due to a change in government, which he intends to reclaim.
“Today, the state government is focused on reclaiming our lives and reclaiming our values, and this means making Ekiti an attractive destination for investors, delivering sustainable economic growth and lifting its citizens out of poverty.
Our tourism assets provide significant investment opportunities. At the appropriate time we would seek investors for some of our existing assets as well as several green field opportunities. These will be complemented by a clear strategy on attracting business and recreational, wellness tourist to Ekiti State.”
He said plans are also underway to drive the state’s ease of doing business reforms, adding that the state’s focus on agriculture will improve the productivity of famers and provide the infrastructure required for processing activities.
“The market is already responding to our approach and we expect to close a partnership with one of Nigeria’s leading dairy company soon,” he further disclosed.
Asides Agriculture, the governor said the state has identified the development of its knowledge zones that will reposition it to take its place as the acknowledged capital of the country
Speaking to the concerns of insecurity plaguing the state, Fayemi said, the case for security is not inexplicably disconnected from the case of investment. He said the government is working with security institutions to address the situation.
He explained that the challenges with security should not stop the government from addressing the sociological underpinnings of crime.
“Let’s deal with crime and insecurity but let us also deal with the causes of crime and insecurity which is the loss of hope in a lot of cases that has bred violent extremism and increasing radicalisation amongst the youth in our country. How do you do that if you don’t create wealth and don’t invest in people or don’t provide avenues for ensuring that there is ease of doing business? So government, the citizens and the private sector all have their part to play. That is why, a strong partnership between the private capital and public spending is what can take us to the promised land.”
Speaking on behalf of the stockbroking community, Rasheed Yusuf, chief executive of Trust Yield Securities and doyen of the Exchange, stated that the act of the state governor in seeking out investors shows an understanding of the fact that the development of any state in Nigeria as a whole depends entirely on collaboration between the private and public sector.
“I believe it is against this background you have come here (The Nigerian Stock Exchange) today. We know about the potential the state holds as well as about the various natural resources the state has, the kind of collaboration you are preaching behind the private and public sector during this time should turn the states resources into a gold mine,”Yusuf said.
Whilst welcoming the governor, Yusuf also charged Fayemi in his capacity as the Chairman of the National Governor’s Forum to spur his fellow governors in growing their individual states through funds sourced from the local bourse.
“If Nigeria must develop its economic resources, if we must surmount the challenge of unemployment, the challenges of infrastructural development, there is no other way other than to have a collaboration between the private sector (The Nigerian Stock Exchange) and the government.
Using Ekiti State’s financial position as an illustration, Yusuf explained that with a 2019 budget of N129 billion and internally generate fund of N6.1 billion, and total FAAC allocation of N38 billion, a whopping gap of N85 billion is left.
He thus advised that the best way for a state like Ekiti to meet its budgetary and economic development expectations is to come to The Nigerian capital market.
In his remarks at the facts behind the investment case session, Oscar Onyema, chief executive officer of the Nigerian Stock Exchange (NSE), commended the state governor, by acknowledging him as a progressive leader with a reform-minded approach in managing the economy of Ekiti State.
“Your strategies towards revitalising the agricultural, manufacturing, mining, trade and tourism sectors, which together account for 75 percent of the state’s gross domestic product (GDP) are also commendable,” Onyema said.
He expressed the exchange’s wish to partner with the State and its agencies to achieve the benefits of privatisation of its state-owned enterprises and other initiatives of both entities across various sectors.
At the Nigerian Stock Exchange, we recognize that to build a sustainable economy for the estimated 3.5 million citizens of Ekiti State, supported by vibrant sectors, both state-owned and private sector enterprises will require access to right-sized capital. We have been longstanding partners with Ekiti State in accessing such capital.
The state governor had in his previous term in office between 2010 and 2014, received the support of the exchange through the issuance and listing of the N20 billion Fixed Rate Infrastructure Development Bond, which financed a number of projects including the Ikogosi warm spring redevelopment, the Ekiti Water Works construction, as well as the refinancing of high-interest borrowings by the state.
In that time frame, Onyema noted that the Ekiti economy expanded by over 63 percent in nominal terms to become a trillion-naira economy, according to data from the National Bureau of Statistics.
“The State also recorded a 15 percent improvement in terms of the enabling business environment assessments by the World Bank.
Today, The Exchange is even more strategically positioned, having transformed into a multi-asset class exchange hub, to further support the developmental goals of Ekiti State in unlocking significant investment value through the listing of public utilities and state-owned enterprises, issuance of subnational bonds, as well as promoting the knowledge economy within the state in terms of public sector capacity building through our technology based learning management system – the NSE X-Academy.
Onyema noted that the Exchange has also convened key players in the capital market ecosystem such as top dealing member firms and a cross-section of listed companies – as a way of bringing interested parties closer to the investment prospects of vibrant state economy, having realised that the ambitions of the state and the capital market are inextricably linked.
Frontpage September 3, 2019