NGX Calls for Government Incentives to Encourage Listing

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CEM REPORT, MARKET | The Nigerian Exchange Limited (NGX) has called on the federal government to provide incentives such that will motivate companies to list on the NGX.

The Exchange notes that with more companies listed the government can generate more sustainable revenue capital and stimulate economic growth required to increase wealth and reduce poverty in Nigeria.

The NGX’s CEO, Temi Popoola, who made the call during an interview also noted that the Exchange is looking to address some age-long issues bordering on new listings which will, in turn, deepen trade.

“The reality is that because listed firms must adhere to regulatory requirements and corporate governance standards to maintain their listing on the Exchange, they are typically more consistent and reliable with their tax compliance. Consequently, the more companies we can get to list, the more revenue the government can make.”

Popoola noted that the NGX is pushing its digital transformation agenda which has led to the establishment of an advisory panel on digital technology products.

He added that the interest of the NGX goes beyond financial services but also the construction industry and Telco.

“In order to push its digital transformation agenda, NGX had gone one step further and established an advisory panel on digital technology products. The Panel would give the Exchange a platform to communicate with the capital market community and the fintech ecosystem to enhance and increase NGX’s digital product offerings.

“We are interested in expanding beyond financial services, the construction industry and Telco. For instance, NGX admitted the first-Generation power company, Geregu Power Plc on the Exchange in 2022 and BUA foods which led to the deepening of the market and a fair representation of GDP. The Agric industry is one sector that has been often said to be underrepresented on the Exchange. As we move to get such listings, we are also looking for companies and sectors with low representation in order to promote a market with equal representation.”

On diversification, the CEO revealed plans to explore listings from free zone companies like the listing of the second tranche of the Lagos Free Zone N25 billion series 2 bonds, the first 20-year corporate infrastructure bond in Nigeria on the Exchange.

Whilst citing ongoing projects within the Lagos Free Zone which were projected to generate $461 billion in the next five decades, he added that NGX in partnership with regulators will be taking steps to accommodate more listings from free zones in 2023.

“Futuristically, we are looking at promoting financial literacy by exploring data dissemination through telco partnerships. We are also keen on aligning our activities to drive the UN SDGs and more importantly to promote the work we are doing in enabling a sustainable capital market ecosystem.”