As Small and Medium Enterprises (SMEs) grapple with $140 million funding gap, the Nigerian Stock Exchange (NSE) has promised efficient capital market that will put them among global corporations.
According to its Chief Executive Officer, Mr. Oscar Onyema, who gave the pledge in Lagos recently at the 19th Annual Stockbrokers’ Conference, with theme, “Entrepreneurship and the Capital Market: Fast tracking a New Economy for Africa,” the main driver of economic growth on the continent has been growth supported by private sector activities.
He noted that many African countries are struggling with poverty, unemployment and non-inclusive growth because there is need for a new solution.
“With the growing understanding that these societal problems cannot be solved or prevented only by the government or development organisations, some businesses, business leaders and talented individuals have tried to transform capitalism; to use the market to solve social problems. This has materialised in what Mr. Tony Elumelu called Africapitalism, which argues that all economic activities should be value-adding and have a social impact that creates wealth. Through long-term investment and the creation of social wealth, the private sector can solve Africa’s development challenges more effectively and with greater sustainability than either the philanthropic or public sector; they can bring private capital to vital infrastructure. They can create jobs which will in turn create an African middle class – a new generation of African consumers.
“NSE recognises its crucial role in supporting economic growth by providing an efficient and sustainable capital market,” he said.
Onyema lamented that despite the fact that SMEs contribute more than 45 per cent to employment and 33 per cent to GDP, they continue to face significant challenges. “Studies indicate that more than 70 per cent of SMEs lack access to medium and longer-term finance, creating an SME funding gap of more than $140 billion in Africa alone. In recognition of these factors, we launched the Alternative Securities Market (ASeM), a specialist board for the listing of SMEs. We remain committed in our vision of promoting and supporting SMEs and are confident that some day, we shall see some of them become globally recognised corporations.”
In his address, the acting President of Chartered Institute of Stockbrokers (CIS), Mr. Seyi Abe, opined that the continent can break out from the vicious cycle of poverty into prosperity when entrepreneurs and governments develop culture of financing ventures and projects through the capital markets.
“The capital market optimally allocates capital and enhances economic performance. It provides a window through venture capitalism for the growth of small and medium scale enterprises and catalyses industrial growth faster.”
It engenders pro-poor growth through greater employment opportunities, creates greater opportunities for home ownership and promotes macro- economic stability,” he added.