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Trade, Industry, Investment Minister tasks world leaders on policies to grow businesses

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Minister, Industry, Trade and Investment, Otunba Niyi Adebayo has said  nations must be proactive and focused to deliver the right policies and programs using the public and private institutions to boost output by providing the right environment and financing for businesses to thrive.

According to him, this is where the capital market should take the lead as a financial intermediator.

In his keynote address in Lagos at the NSE CEO Interactive Session for Consumer Goods Sector, with the theme, “The Role of the Capital Market in Unlocking Value in the Consumer Goods Sector”, the Minister who was represented by Permanent secretary in the ministry, Mr. Edet Sunday Akpan maintained that the federal government remains committed to improving the business environment towards industrialization and economic prosperity.

He revealed that the restriction of the availability of foreign exchange to the importation of 44 items in 2019 which could be competitively produced within the economy and the recent border closure hinges on government’s policy of enhancing demand for locally manufactured goods and enabling favourable competition amongst manufacturers.

According to him, the gains being recorded from this twin policy should increase domestic business activities and make the capital market more active, adding that there is no doubt that the consumer goods sector remains a critical segment and plays an integral role in the development and advancement of the Nigerian economy.

“Available statistics shows that Nigeria’s Gross Domestic Product (GDP) grew 1.94per cent, year on year in real terms in the second quarter of 2019, with the manufacturing sector contributing 11.49percent to nominal GDP. The sector has nonetheless experienced various economic turmoil in recent years, as witnessed in areas like foreign exchange challenges between 2014 and 2017.

“Immediate steps were taken to redress the problems as in the ban of 41 items in 2015. We also can recall currency depreciation which triggered higher cost of production, Insecurity in the country leading to reduced sales, high excise duties on importation of raw materials and multiple taxations, just to mention but a few.

“I believe that the purpose of this interactive engagement today is to formulate strategies and collaborative efforts with the federal government to optimize the intrinsic potentials in the sector and to proffer solution. Nigeria is one of the fastest-growing consumer markets not only in Africa, but the world at large. Nigeria’s consumer market is valued at $377 billion in 2013 and expected to peak at $454.3 billion in 2025. This growth is driven by three major factors – population, urbanization and increased spending power. It is common knowledge that the existence of a large market presents an opportunity for growth in the consumer goods sector,” he stated.

Speaking further, he noted that Nigeria with a population estimated at 200million people with 72per cent under the age of 30 indicates huge potential for future investment and consumption activities.

In his opening remarks at the event, Chief Executive Officer of the Nigerian Stock Exchange, Oscar Onyema said that the event comes at an interesting and pivotal time in the real sector of the Nigerian economy.

He said that the Nigeria’s consumer market is one of the fastest growing markets in Africa. “As far back as 2013, the market was valued at about $377 billion and is now expected to reach about $454 billion by 2025.

“This growth is driven by three major factors – population, urbanization and increased spending power. The country’s estimated population of over 200 million, with 72 per cent under the age of 30, presents a huge potential for future investment in consumption activity.

“In 2019, the NSE Consumer Goods Index in particular has recorded a significantly higher negative return of 29.01per cent year to date compared to the NSE Industrial Index returning -13.26per cent and the Main Board Index returning -22.48per cent.

“It is not all doom and gloom as the industry has witnessed some progress as well. To address challenges relating to poor corporate performance, many consumer goods and industrial firms have looked inwards for local alternatives for raw materials, with specific focus on backward integration and also exploring different product lines.

“This brings me to policy advocacy and strategy execution efforts of the Nigerian Stock Exchange, in ensuring positive impact to the private sector and more importantly our listed companies. The work done in the area of ease of doing business reforms, which The Exchange has supported has helped improve the country’s rankings in the World Bank Doing Business report from #169 to the current #131 over the past three to four years. This progress was due to reforms initiated and implemented by the Nigerian Government to provide enabling environment for businesses to thrive,” Onyema stated.

The NSE boss equally maintained that the exchange also continues to engage the federal government on tax incentives for listed companies and exemption relating to investments in the capital market. “We are delighted to note that we have made some strides in our discussions, some of which are evident in the proposed amendments to The Finance Bill 2019, which has now been passed by both Houses of the National Assembly.

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