‘More Incentives Needed to Attract Investments to Capital Market’

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The federal government has been advised to give more tax incentives to investments in the Nigerian capital market in order to attract capital that can be used to fund infrastructure.

The acting Director General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk, who made the call said although the Finance Act of 2019 has provided some initiatives that are in support of the capital market, there should be more tax incentives to encourage the flow of capital into the market.

“I want to say that we appreciate government for the Finance Act of 2019 and a number of initiatives that are in support of the capital market. We had expected more because we have been working on those initiatives for many years with Federal Internal Revenue Service (FIRS) and other relevant stakeholders. “The government has through the Finance Act answered some of our prayers. There are others that we thought they would have done like the issue of taxes but they gave us what they thought we should have. We will continue to push for more tax reductions in different areas,” she said.

According to her, the focus is driving investments to the capital market and the economy at large and for that happen, the issue of tax incentives is very critical.

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“For instance, infrastructure funds can only be provided with the support of the private sector through the capital markets that are known for long term investments. So, we should be able to have infrastructure funds and such investments, of course, should enjoy tax incentives. Private equity funds that also drive investments in SMEs, venture capital among others are critical.

“Government can look at private equity funds operators who can invest in core areas of the economy like mining, agriculture and grant certain incentives to them. Such incentives will drive inflows of capital into those areas and the capital market,” Uduk added.

Meanwhile, the SEC boss noted that efforts were being made to ensure more companies list in the stock market. According to her, there is committee going round engaging some of the companies to come to the market.

She said: “We also have a standing market committee that is driving this issue encouraging and engaging other companies to come and list in the market. Don’t forget that these companies are private companies that are family companies, so it takes a lot to get them to come to the market. We are also looking at what the requirements are that the companies find hard or difficult to comply with. We will work with them to ensure how we can bring them to the market,” she said.

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