Gambo A Arabart Lafia.
Professor of Capital Market, Uche Uwaleke at the Nasarawa state University has asserted that ongoing reforms by the federal government has led to the reduction in Nigeria’s debt servicing cost.
Uwaleke, who made the assertion at the 50th Inaugural Lecture of the Nasarawa State University Keffi, on Wednesday also opined that it was high time for the country to engage on new methodologies to borrowing.
Pro Uwaleke who described the theme of the Lecture Series, “Unlocking Wealth And Leveraging Entrepreneurial Knowledge Ecosystem: Understanding Capital Harnessing Essentials (UWALEKE UCHE), the first Professor of the Capital Market.
He reaoted that over-reliance on traditional borrowers and the international debt capital market poses a challenge to Nigeria’s long term debt sustainability.
The professor further admonished the federal government to take a new route of ensuring that it links its debt service plans to its Gross Domestic Products.
He emphasized that the government should only borrow to fund cardinal projects that are self liquidating.
According to him “Consistent with the Fiscal Responsibility Act 2007 and in view of the country’s huge debt burden, governments should borrow only to fund projects that are self-liquidating.
“In order to optimally diversify the country’s debt portfolio, other external funding windows, such as the growing renminbi (RMB) market, should be explored with the overarching objective of securing the best deals that reduce borrowing costs,”
Prof. Uwalek who dwelled extensively on the significance of a stimulating environment that enables businesses to thrive, said reforms have had salutary effects on government revenues, forex market stability and external reserves.,
He continued that “ The recorded improvements in government revenues and reduction in the debt service ratio from over 80% to less than 70% represent positive fallouts of the reforms.
“moving forward, the tax reform Bills hold a lot of promise for the fiscal space and will go a long way to revamp the ease of doing business, boost SME growth and improve the macroeconomic environment.
“As we continue to witness improvements in the macroeconomic environment, the need to access long-term capital to accelerate economic growth cannot be overstressed. To this end, I propose the adoption of the IPO (Incentives, Privatization, Optimization) approach to strengthen the capital market in Nigeria and harness long term funds required to develop entrepreneurial knowledge ecosystems and unlock wealth.
“This could take various forms and have the potential of encouraging more companies to seek quotation on the Exchange. "
In his address, Vice President Kasshim Shetimma said the capital market holds the key to addressing Nigeria’s infrastructure challenges.
The Vice President, who was represented by the Minister of Women Affairs, Hajia Imaan Sulaiman-Ibrahim, said for long, Nigeria has paid lip service to finding lasting solutions to its development challenges, leaving the consequences for successive governments and generations to bear.
“This is why we must pay close attention to the performance of our capital market—it is the ultimate measure of our economic prosperity." The vice president maintained.
