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Nov 30, 2015

Nigeria securities regulator launches plan to attract foreign investors

Nigerian SEC’s 10-year Capital Market Master Plan seeks to boost markets in Lagos

Nigeria’s securities regulator has launched a national fund to insure investors against losses caused by local capital market operators and has created a governance scorecard to rate local publicly traded companies in an effort to attract international investors to the Nigerian Stock Exchange (NSE).

The country’s new National Investors Protection Fund (NIPF), which totals 5 bn Nigerian naira ($25 mn) is meant to compensate investors for ‘financial losses arising from the insolvency, bankruptcy or negligence of registrars, solicitors, issuing houses and fund managers,’ says Mounir Gwarzo, director general of the country’s Securities and Exchange Commission (SEC), according to local media including the Nigerian Sun.

‘While dozens of jurisdictions have functional investor protection funds run mainly by exchanges and their dealing members, Nigeria is now among only a few countries to have an NIPF,’ Gwarzo says. He calls the NIPF a ‘seed fund’ and says the sum will grow with contributions from ‘the capital markets community’ in the country.

Gwarzo made the announcement at a press conference held in Lagos to outline the country’s 10-year Capital Market Master Plan, designed to increase foreign investment in Nigerian capital markets and attract foreign capital to invest in the country’s infrastructure.

At the same time, the regulator launched its Corporate Governance Scorecard, designed with the help of the International Finance Corporation, meant as an annual indicator of the state of governance of publicly traded companies in the country.

Gwarzo also called on the government to offer tax incentives for foreign companies that list on the NSE, with an emphasis on telecommunications and others willing to invest in the country’s infrastructure. He said the SEC will work with the government through 2016 on a series of measures meant to encourage companies to list on the exchange.