A former governor of Anambra state, Peter Obi has urged the Nigerian government to shelve its plan to borrow funds from China to build an airport. Obi added that a project of that kind should be funded through the country’s capital market.
While speaking at the second capital summit titled “The Road to Nigeria’s economic recovery” in Lagos, Obi stressed that the government needed to set up regulations that will ensure publicly privatised businesses are listed on the Nigerian Stock Exchange, NSE. He further stated that the NSE was shallow because of “an absence of structure and needed regulations”.
He also criticised the government’s provision of intervention funds.
“Nigeria has been in contraction for five quarters, so we should work quickly to move away from this recession. There is nothing wrong with borrowing when there is a recession, but it must be done reasonably to attract investments and savings. So, borrowing is not bad except when the money is not used judiciously. There were no savings yesterday, that is why we are where we are today. The value of our capital market is just too low, about $30billion and that cannot attract foreign investors. We cannot compare ourselves now to Mexico, Taiwan, Turkey, Indonesia, Singapore etc. whose economies were similar to ours in the 1990s.”
“There is a strong correlation between the development of an economy and its capital market. Apart from other roles, capital market primarily helps to mobilise funds from the surplus economic units and channels them to the deficit ones”.