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Published On: Mon, Feb 3rd, 2020

Private Equity Firms agents of economic growth -Uduk

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By Etuka Sunday

The Acting Director General of the Securities and Exchange Commission, Ms Mary Uduk, has said that Private Equity (PE) firms are important agents of business and economic growth, as they bring capital to business.
Uduk spoke at the Udo Udoma & Belo-Osagie (UUBO) second private equity summit with the theme: ‘Drivers, Disruptors and Unlocking Value’, held in Lagos, weekend.
The acting Director-General said there was a nexus between adequate capital and business growth as such capital helps businesses grow, generates profits for the investors, creates socio-economic benefits to the consumers, and enhances overall growth of the economy.
According to her, Nigeria has lots of startups with robust business plans, many profitable unlisted companies with established cash-generating capacity, as well as public companies with solid customer bases, proven products, and high-quality management.
She stated that all these businesses and opportunities were yearning for investments, and PE firms can tap into this.
“I see an improved investment climate, friendly market rules and regulations as well as increased investor education as essential elements for attracting PE investments in Nigeria.
“Towards this, the Commission is working on Rules and Regulations to ease participation of, and disclosures, by more PE funds. Initiatives in registering and developing the FinTech space in the capital market will also provide good opportunities for PE firms to invest in innovative start-ups operating in in the capital market.
“The ISA 2007 empowers the Securities and Exchange Commission to register PE Funds. Based on their scope and the need to attract investors such as the Pension Funds, many PE firms and Infrastructure funds (often structured as PE), file their returns with the Commission,” Uduk said.
Uduk said The capital market provides the most efficient gateway opportunities for PE firms. The NASD Enterprise Portal, as a collaborative development in the market, aims at aiding PE firms invest in and dispose of eligible companies’ securities in an easy and cost-effective manner.
According to her, As PE activity rises in the country, PE funds can utilise the opportunities provided on our various organised exchanges when exiting their investments. This will increase the quality of our listed public companies, while allowing PE firms benefit from the market liquidity, efficiency and increased participation available on the exchanges.
“It is therefore my hope that the outcome of this Summit will impact greatly and positively on the PE segment of our market, the capital market in general and our economy as a whole.
The Minister of Industry, Trade and Investment, Chief Niyi Adebayo, delivering a keynote on ‘Fostering an enabling environment for investment in Nigeria’, said that the federal government would seek to localise at least 40 per cent of its expenditure on stipulated goods and services, to facilitate local markets access for Nigerian made products.
The minister said that government had realised that building production capacity alongside strategic partners with strong track record in some priority sectors was critical to success.
“Through the Nigerian Investment Promotion Commission, bilateral investment agreements are being modernised with a greater sense of purpose.
“Much of our most recent agreements target countries that align with our ambition of building local production capacity,” he said.
According to him, government will seek a comprehensive approach in mobilising capital, incentivising priority sectors and expanding market access for local producers.
Adebayo said that government would further enhance the ease of doing business and support the growth of MSMEs.

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