‘How NNPC’s public offer may expand GDP’

A Professor of Finance and Capital Market, Nasarawa State University, Keffi, Uchenna Uwaleke has said the planned Initial Public Offer (IPO) by the Nigerian National Petroleum Corporation (NNPC) will grow the capital market contribution to the gross domestic product (GDP).

Uwaleke made the statement following the disclosure by the Group Managing Director of NNPC, Mele Kyari, during an interview granted to Bloomberg on Monday that the earliest the corporation can issue its IPO to investors is in the next three years.

At less than 20 per cent to the country’s GDP, the capital market stakeholders have argued that the current size of the market constrains its role in national economic development, insisting the time is ripe for proper structures to be put in place for the development of a deep and expansive capital market in the country.

Prof Uwaleke said: “That is one of the best news that has come out of the Nigerian capital market.

“This decision signals the confidence of the government on the capital market and it has a herd’s effect because the thinking will be if the government is showing interest, why not us.”

He said the move will expand issuers’ base, grow the market capitalization and grow the capital market contribution to the gross domestic product which has been very low.

“This indeed has a way of attracting other issuers who have been reluctant,” he added.

Prof Uwaleke urged the Nigerian Exchange Limited to be alive to its responsibility by commencing some form of facilitation; “so that they don’t go to sleep. So they can help with some advisory to facilitate entrants.”