The African Development Bank Group’s (AfDB) commitment to financial institutions and infrastructure development in Nigeria now stands at $1.3 billion. The amount represents 30% of the AfDB portfolio.
The Bank’s Managing Director, AfDB’s Nigeria Department, Kanin Barrow, made this known in Abuja while signing a $460,000 deal with the Securities and Exchange Commission (SEC).
AfDB and SEC signed the agreement to support the acquisition and deployment of automated capital market surveillance systems to enhance the role of the SEC in protecting investors and ensuring a transparent, fair market and orderly that reduces systemic risks.
The CEO said the intervention included a $10 million financial package for Infrastructure Credit Guarantee Company Limited (infraCredit) which aimed to support the development of the corporate bond market.
Barrow noted that the bulk of the interventions came in the form of lines of credit to financial institutions and that market support was particularly aimed at infrastructure development and currency risk mitigation.
He disclosed that the Bank was also supporting the Nigeria Infrastructure Debt Fund through a $10 million facility that provides long-term debt financing in local currency.
He said, “The aim is to attract local pension funds and other institutional investors for infrastructure development in Nigeria.
“The pandemic has heightened global risk aversion, prompting international investors to shift their portfolios to safer assets and safe havens.
“We want to see equity market growth well beyond the current N28.16 trillion.
“This is why the AfDB Group supports initiatives aimed at integrating Africa’s capital markets and innovative financial instruments.
“This has become even more urgent with the establishment of the African Continental Free Trade Area (AfCFTA).”
Barrow said the surveillance system will strengthen SEC regulatory and oversight oversight of securities trading in the country and would be implemented in two years at a cost of less than $1 million, with more than 500,000 dollars to be contributed by the SEC.
“The grant came from the Capital Markets Development Trust Fund (CMDTF), a multi-donor trust fund administered by the AfDB and supported by the Luxembourg Ministry of Finance and the Netherlands Ministry of Foreign Trade and Cooperation.
Lamido Yuguda, managing director of the SEC, said a market surveillance system was needed to help the SEC detect and deal with market abuses as quickly and efficiently as possible to prevent breaches.