FG, corporates raise N2.4trn from capital market –NGX

fg corporates raise n2 4trn from capital market

By Chinwendu Obienyi

The Nigerian Exchange Limited (NGX) recently, disclosed that the Federal Government, corporates have so far raised N2.4 trillion from the capital market through equity, debt and other products this year.

The Divisional Head, Listing Business at NGX, Bolumole Olumide, stated this during a webinar, themed Capital Raising for Small Medium Enterprises (SMEs) through the Stock Exchange, held in Lagos.

While noting that the theme is in furtherance to the NGX’s commitment to educating business promoters on the alternative funding available in the capital market to catalyse growth, Bolumole said that the reality and headwinds by operators are quite daunting as economic landscape in recent years have proven quite challenging with infrastructure and others burdens experienced by corporate being amplified.

Citing insufficient power supply, poor book-keeping, low access to financing, multiplicity of taxes as well as limited availability of skilled manpower as challenges affecting SMEs, Bolumole noted that the COVID-19 coupled with rise in inflation as well as devaluation of the Naira has also negatively impacted on businesses of the SME industry which has been unable to reflect in price of products and services.

According to him, there is a need for these companies to scale allowing them to better navigate the business environment requiring medium to long term capital.

“Research studies show that despite the economic importance of SMEs,  they struggle to get adequate financing to enable them grow and truly realize their potential. The NGX as a platform for capital formation, has products and services to support capital raising by various categories of corporates.

For instance, despite the impact of COVID-19, NGX functioned to facilitate the much-needed finance of about N2.5 trillion in capital raising by government and corporate in 2020 across various asset classes. This has continued into this year with over N2.4 trillion raised through equity, debt and other products. Last year we launched the NGX growth board to cater for SMEs and we hope SMEs could come and access finance via the stock market”, he said.

Also the President, South East Chamber of Commerce, Industry, Mines and Agriculture (SECCIMA), Humphrey Ngonadi, said SMEs are crucial to the growth and development of a nation or economy

“The significance of SMEs points to the growth and development of any economy as they empower a large percentage of the labour force and provide an avenue to harness entrepreneurial capacities, technological scale and innovation”, he said.

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