Excellences, Accomplished Business Leaders, Distinguished Delegates, Ladies and Gentlemen; Good morning and welcome.
It gives me great pleasure to welcome you all to the second Lagos and London Capital Markets in Partnership Conference. This event is particularly dear to me as it comes at an interesting and pivotal time in the history of our Nation, Economy and the Global Financial Markets. That many of you have travelled long distances to be here serves to
remind us all just how important these issues are and that ultimately the way-forward must be designed and delivered by us.
The first quarter of 2016 has been a wild ride for most economies and markets; – in some ways a tale of two halves. Asset prices collapsed in the first part of the quarter, but as oil turned the tide in February, some recovery followed. The second quarter beckons to be no less volatile - as oil prices have begun a retreat, geo-political tensions remain, and central bankers find themselves still walking a fine wire.
In Nigeria, we all know too well the intricacies facing the Economy and Markets. With increases at a pace not familiar to recent memory, inflation is back in the double digits. Rigidity in the FX markets continue to be a challenge. Yet, Nigeria remains top of mind on the African continent for investors!
The theme of this conference – “Leveraging Cross-Border Capital Markets for Sustainable Growth” – is quite topical for the Country at this time. As the Government grapples with the task of articulating a clear economic blue print for the short to midterm within which credible fiscal and monetary policies can emerge, and diversifying the economy in the face of depressed earnings from legacy sources, the reality of the need to leverage and embrace the globalisation of economies and financial markets becomes clearer.
Capital Markets are critical to sustainability of growth and development in an Economy. It is my strong belief that one of the things that Nigeria (and Africa) needs to sustain its growth, is a solid and vibrant capital market ecosystem that will attract investment and unlock the potential that exists in the economy. Capital markets increase the proportion of long-term savings that is channelled to long-term investments.
Based on current outlook for Economies and Markets of the G7 countries, only the economies of the United States and United Kingdom appear on track to have sustainably exited the global financial crisis of 2008. Why are The UK and The US ahead? One of the key differentiating factors these two markets have in common, relative to the others, is a strong and resilient capital market/financial system.
Former US Federal Reserve Chairman, Ben Bernanke once said: “the lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis”.
The capital markets in the United Kingdom and the United States dominate these countries’ financial systems, in marked contrast to France, Germany, and Japan, where banks are more important. Regardless of whether one examines the UK or the US over time, or compares their performance with other developed countries on a cross-sectional basis, the conclusion is unmistakable. Capital markets have been the driving force behind the development of the UK and US financial systems.
The development of capital markets in London was catalysed by “Big Bang” in 1986, which ended the fixed-rate equity commission system and spurred the entry of large-scale US investment banks into the London market. “Big Bang” reinvigorated the UK equity market and facilitated the further growth of London as a global financial center.
A similar catalytic event must take place in Nigeria; to position our capital market as the sustainable financial center in West Africa, and for Africa! …. And it starts with us here, today.
Our collaboration with the London Stock Exchange is deliberate and strategic. It is geared at encouraging seamless cross-border access between our Capital Markets to ultimately drive deeper capital markets that enable capital formation for Businesses and Governments; create larger liquidity pools and greater competitiveness for our investors; and enhance capacity and promote diversity of investment products to meet the needs of a wide range of investors and issuers.
The opportunity is here, and the opportunity is now. Creating and sustaining the growth trajectory of our exchanges, capital markets, financial markets, economies and the continent as a whole, requires a strong commitment from each and every one of us here today. It is not an easy journey, but it is one we have no choice but to embark upon, individually and collectively, in order to guarantee our competitive advantage in today’s interconnected world. The world is getting flatter every day, and with soaring world populations, we must facilitate the drive for wealth creation for our own people, while providing the platform to which global savings can be channelled. We must use this opportunity to partner with each other, to enable us further unlock our growth potential, and advance the development of our financial and capital markets.
I have no doubt that the programme at this conference will surely drive the level of engagement and idea generation that will solidify and strengthen our capital markets partnership. But more importantly, I believe that the learnings from our interactions will elevate our business strategies to ride out the headwinds that our markets have experienced this year. In the end, I sincerely hope that we are better positioned to unlock our Economy’s growth potential, and empowered to advance the development of our capital markets.
Thank you for your attention and anticipated contributions to the dialogue during this conference. Once more, I welcome you all to our 2nd Dual listings Conference, and I wish us all fruitful deliberations.
Thank You.