Experts and industry players at the just concluded 8th Edition of the Manufacturing & Equipment Expo, West Africa 2023 urged manufacturers nationwide to look to the Nigerian capital market for funding to ensure they scale.
They also advised the Securities and Exchange Commission to liaise with manufacturers to bring them back into the capital market.
Veteran financial journalist, Boason Omofaye speaking during a session moderated by Prof. Pat Utomi lamented that over the years the industrial manufacturing companies have declined in number among the quoted companies in the Nigeria stock market.
What Omofaye said
He referenced the current absence of the textile industry in the Nigerian stock market as a testament to the decline.
In his words,
Over the years, I’ve seen the number of industrial, manufacturing companies decline in number among the quoted companies of the Nigeria Stock Exchange and that makes me sad each time I think about it”
“I’ll advise those who are in the industrial manufacturing sector to approach the capital market, I know that everybody will come up with a few issues. But this year, the corporate bonds market is down half a year by 86% but the commercial papers market with the big names like Dangote has grown exponentially. The figure from PwC shows that the manufacturing sector accounted for about 55% of the total while the financial services accounted for just about 41%”
He explained that the figures show that the manufacturing sector is ready to push to get finance. He noted that the stock exchanges of other African countries like Tunisia, Egypt, South Africa, and Morocco etc, are dominated by companies in the industrial and manufacturing sector which is not in Nigeria.
Being listed in the stock market makes it easier for international investors and financiers to do business with you (manufacturers).
On his part, Bright Eregha, a senior academic at the Pan Atlantic University said the Nigerian capital market has been largely affected by fiscal policies from the government hence its low share of the capital market in comparison to GDP in Nigeria unlike in other African countries.
He said,
“For example, market capitalization as a share of GDP in South Africa is around 275% while in Nigeria it’s about 25%. This is to tell you our capital market is not developed. This is because the fiscal and monetary policies do not boost capital inflow into sectors like manufacturing.”
He further harped on the role of manufacturing in any country’s industrialization and noted that manufacturing contribution to GDP has not changed significantly since independence.
Also speaking at the event was Yele Oyekola the co-founder of Duplo who highlighted the challenges of the manufacturing sector to include inflation, funding, government support, and skill development.