Uwaleke urges capital market Utilisation to revive dormant assets
Onome Amuge
Uche Uwaleke, a professor of Capital Market, has identified the immense potential that Nigeria’s idle resources can unlock, provided the country is able to successfully mobilise medium-to-long term capital from the capital markets.
Uwaleke made the assertion in an inaugural lecture titled “UNLOCKING WEALTH AND LEVERAGING ENTREPRENEURIAL KNOWLEDGE ECOSYSTEMS: UNDERSTANDING CAPITAL HARNESSING ESSENTIALS”, delivered recently at the Department of Securities and Investment Management Faculty of Administration, Nasarawa State University, Keffi.
The president of the Association of Capital Market Academics of Nigeria (ACMAN) highlighted the abundant natural resources that have positioned Nigeria as a potentially wealthy nation, particularly its abundant reserves of crude oil, natural gas, and solid minerals such as coal, limestone, and tin, as well as its vast arable land for agriculture.
Furthermore, he noted that Nigeria boasts one of the largest and youngest populations in the world, with over 200 million people, representing a significant potential workforce and market.
In November 2024, Focus Economics released a report ranking Nigeria among the 20 poorest nations in the world based on GDP per capita estimates for 2025, despite its vast oil wealth.
Uwaleke, in his analysis of the report, highlighted the glaring paradox of Nigeria’s poverty in the face of abundant natural resources, particularly crude oil.
The Capital Market professor further pointed out that Nigeria’s classification as a Lower-Middle-Income Country (LMIC) by the World Bank, based on Gross National Income (GNI) per capita, fails to capture the country’s vast potential wealth.
He noted that while this classification does reflect the nation’s average income level, it does not accurately capture the vast amount of natural resources and untapped potential that Nigeria possesses.
Drawing from his vast knowledge of capital markets, Uwaleke proposed that the mobilisation of medium-to-long term funds from capital markets could provide the catalyst needed to unlock Nigeria’s hidden wealth.
Uwaleke also lamented the misallocation of funds raised from the debt capital market, pointing out that such funds, which should have been allocated for long-term capital projects, were instead diverted to meet recurrent needs, leading to a mismatch in public spending.
He expressed concern that this recurring pattern of misappropriation has been an impediment to harnessing the vast wealth of Nigeria’s idle resources.
He stated: Section 41 of the Fiscal Responsibility Act (FRA)2007 provides that ‘government at all tiers shall borrow for capital expenditure and human development’ and such borrowing should be long-term and concessional in nature. Over the years, it would appear that this has been observed more in the breach leaving in its wake a huge debt burden evidenced by the relatively high debt service to revenue ratio.
“A related issue is the choice of borrowing instruments which appear inconsistent with the provisions of the FRA 2007. Domestic debts are dominated by FGN Bonds (78.95%) most of which do not appear tied to self-liquidating projects. The real infrastructure-tied bonds, Sukuk and Green bonds, represent an insignificant proportion (less than 2%).”
Uwaleke stressed the need to diversify Nigeria’s debt portfolio to mitigate the risks associated with heavily relying on a single source of funding, particularly in light of the increasingly challenging conditions associated with securing concessional loans from multilateral sources.
In his view, exploring alternative external funding sources, while maintaining a keen focus on securing the most competitive financing terms to minimise borrowing costs, is imperative for maximising the country’s resources and promoting sustainable economic development.
In his proposed strategy to diversify Nigeria’s debt portfolio and secure lower borrowing costs, Uwaleke identified the potential of the growing renminbi (RMB) market and the renewal of the currency swap deal with China.
He pointed out the benefits of considering a Panda bond issuance, given the lower indicative pricing compared to Eurobonds, as well as the rapidly expanding bilateral trade between Nigeria and China.
Uwaleke further recommended infrastructure bonds and climate bonds as additional strategic avenues to consider for diversifying Nigeria’s debt portfolio and financing critical infrastructure development and climate change mitigation projects
