The African Development Bank (AfDB) Group last Friday signed a $400,000 grant agreement with the Securities and Exchange Commission (SEC) of Nigeria to strengthen securities markets regulation and broaden market instruments.
The funds will go towards strengthening risk-based supervision framework, regulation of derivatives and green bonds, and build capacity for green finance. The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the bank.
Speaking on the development, the Senior Director, AfDB Group, Mr. Lamin Barrow, said: “We are very delighted to sign this agreement, which enable us accelerate the implementation of key initiatives.
“The grant will enhance the capacity of the SEC in risk-based supervision framework for the financial and securities market, strengthen operational readiness in the areas of risk-based publishing, derivatives and green bonds trading market.
“It will provide capacity building and training programmes for the NSE, issuers and institutional investors on green bonds, as well as market operators and regulators from the wider Economic Community of West African States (ECOWAS) region.
“Experience has shown that countries with developed domestic capital markets have posted stronger economic growth and structural transformation and that is why AfDB Group is supporting the emergence of a well-functioning and resilient financial and capital market in African countries through various mechanisms.”
Also speaking, the Director-General, SEC, Mr. Lamido Yuguda said SEC was focused on capacity development as a catalyst to drive the actualisation of the 10-Year Capital Market Masterplan 2015 – 2025.
Consequently, SEC designed a targeted training programme to address gaps in regulation and market development to enhance the commission’s readiness to effectively regulate new products and promote the growth of the capital market.
Some of the initiatives include the procurement of surveillance solutions, capacity building in the areas of risk based supervision, green finance and derivatives.
He said realising that the focus areas align with AfDB’s high five priority sectors for the economic transformation of Africa, “we leveraged our strong partnership with AfDB to drive some of these key initiatives to strengthen internal and issuers’ capacity.”
He added: “We are pleased and thankful to AfDB for providing the grant and supporting in the execution of this project. We believe your support and our collaboration underscore the commission and the bank’s mutual goal to grow the capital market and create viable avenues for sustainable economic growth for Nigeria and the region.”
The Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said:“On behalf of the National Council and Executive Committee of the NSE, I congratulate the SEC and AfDB on the signing ceremony of the Nigeria risk based supervision framework implementation and capacity building project. “Under this initiative, the SEC in collaboration with the NSE will work with industry experts to develop a tailored green bond issuance framework template for the Nigerian market, enhance the capacity of market operators and build the in-house regulatory capacity of the commission and the NSE in the sustainable finance space.”