‘We are aligning FMDQ’S mission with Nigeria’s economic agenda’

the success of the FMDQ markets and, indeed, development of the Nigerian economy, are recognised.

I can go on and on about our initiatives and aspirations for the Nigerian financial market and economy. However, I will end by adding that FMDQ is committed to innovation and deploying initiatives that empower our economy and invariably, improve the lives of Nigerians. Through FMDQ’S franchise, our message of prosperity will continue to be disseminated to all; governments - federal and states, investors – domestic and foreign, institutions and individuals alike.

Despite the economic downtime experienced, how have the FMDQ markets fared over the last few years?

The first five (5) years of FMDQ, from 2013 to 2018, were reflective of the Exchange’s unwavering commitment to make the markets GOLD. Attaining its first lustrum in November 2018 and closing the year with a market turnover of N182.86 trillion (from N103.57 trillion in 2014), I dare say that FMDQ has significantly improved the standards of the Nigerian fixed income, currency and derivatives markets and has continued to institute requisite product innovation and market infrastructure to support sustained development and best practices in these markets. The market turnover at half year 2019 was circa N100.00 trillion.

The debt market size is currently at the N32.38 trillion level and the FX and FX derivatives markets have also continued to stabilise, thanks to the efforts of the CBN for sustaining the FX hedging product, the Naira-settled OTC FX Futures for which FMDQ acts as the Futures Exchange. Similarly, the Investors and Exporters FX Window now in its third year has continued to show commendable resilience to stress over time with year-to-date value of trades at the window rising to circa $37.60 billion by the end of July 2019.

Indeed, five (5) years down the line, the FMDQ markets have been marked by the actualisation of strategic and indeed, far-reaching initiatives towards improving market activities and these markets have steadily continued to develop and perform reasonably better than, perhaps, expected. To this, I must commend the efforts of all the FMDQ Members and market regulators, through whom we have collectively built and sustained the market that we see and appreciate today.

FMDQ is effectively 6 years in operation. Within this short period of operation, the Exchange can be said to have become a systemically important organisation. Looking ahead, what is your outlook for FMDQ and its markets in the next 5 years?

FMDQ Exchange’s achievements and per your recognition, its identification as a systemically important organisation, have been realised mainly because of FMDQ’S champions, architects, regulatory visionaries, such as the Securities and Exchange Commission, Central Bank of Nigeria, Debt Management Office, and National Pension Commission, Financial Markets Dealers’ Association, FMDQ Members, our Media Partners, such as your good self, and other partners and stakeholders working tirelessly to promote the franchise. So, firstly, I’d say that we would continue to leverage on these relationships and engagements, staying resolute to our commitment to make the Nigerian financial markets GOLD by pursuing our strategic roles of being an adviser to financial services regulators and government, the Nigerian financial markets diplomat and very importantly, the catalyst for unlocking infrastructure capital in Nigeria.

In consolidating the gains from previous years towards the next 5 years, the Exchange, in the medium- to long-term is looking to integrate the markets within its purview with external markets, fostering an alignment of our standards with international best practices as a crucial step towards becoming globally competitive. Already, this integration has begun with notable activities in the area including the co-branding of the Nigerian Sovereign Bond Index with the world’s leading index provider, S&P Dow Jones Indices. The first co-branded index is the S& P/ FMDQ Nigeria Sovereign Bond Index and a host of others are expected to follow. There is also the strategic partnership between FMDQ and Thomson Reuters (now Refinitiv) towards providing the much-need capacity building and technical advancement for the Nigerian financial market. Furthermore, in partnership with Climate Bond Initiative, UK (CBI) and FSD Africa - a UK-AID initiative - the Nigerian Green Bond Market Development Programme, a 3-year Programme to educate stakeholders on and promote the issuance of green debt securities targeted at environmental-friendly projects and investments in Nigeria, was launched, and will generate awareness and drive the required engagements to integrate the principles of green financing into the Nigerian DCM. To continue to fulfil its mission of empowering the Nigerian financial markets to be innovative and credible, in support of the Nigerian economy, as well as meet the expectations of its stakeholders, the Exchange, will not rest on its laurels, and will continue to strengthen existing and seek new strategic alliances to support its market innovation drive as well as improve its knowledge of global best practices.

Furthermore, in line with FMDQ’S market integration agenda, 2019 and beyond will see the full operationalisation of the recently deployed FMDQ Dealing Member (Specialist) [DMS] market to reduce fragmentation and further consolidate the markets, as well as foster retail participation in the fixed income markets. FMDQ will also work assiduously to implement its Derivatives Market Implementation Roadmap towards developing the derivatives market.

Given the urgent need to activate hedging products for the benefit of both domestic and international market participants, the Exchange will ramp up all efforts to ensure market readiness towards launching derivative market products Also, we expect to activate new products such as repurchase agreement (Repo) with collateral management service, alongside other product innovation and initiatives arising from time to time in the course of meeting the needs of the markets. In addition to this, and critical to the well-functioning of the derivatives market, the operational capabilities of FMDQ Clear will be further developed in anticipation of its gradual positioning to offer central counterparty services, and the CSD subsidiary, FMDQ Depository, shall be fully operationalised to provide first- class services in the financial markets.

Finally, our agenda to operate a fully diversified and integrated financial market infrastructure group, offering execution, clearing and settlement opportunities in a most efficient way to the market stakeholders, will invariably guide the direction of the business franchise in expanding its frontiers to other markets over the course of the next lustrum.

As a full-fledged securities exchange, will FMDQ Exchange now play in the equities and commodities markets space?

Every time I am asked this question, my response typically is same. The development of the Nigerian financial markets is the collective responsibility of all financial market participants, including FMDQ and its entities. Beyond providing a robust platform for execution, clearing and settlement, as a securities exchange, our overarching aspiration remains to fully diversify and vertically integrate our markets, offering the full spectrum of products tradeable on an exchange, as well as the associated infrastructure towards ensuring capital access, investment opportunities, value transfer and undoubtedly, efficient risk management.

The Exchange will, therefore, undertake and pursue interests required to harmonise and achieve its objectives of making the Nigerian financial market GOLD. We shall continue to engage our stakeholders and regulators and in so doing, proactively relay solutions to their market needs, whether within our immediate reach or otherwise. We are in business to anticipate the needs of the market participants and commence solving these even before they materialise, so we would engage in activities required of us as an entity to facilitate ease of investment flows as well as capital raising through our markets. We will get involved with any initiative that will promote the global competitiveness of the Nigerian financial markets, offer products and services that will de-risk the markets and bring prosperity to Nigeria, Nigerian corporates, investors in Nigeria and Nigerians.

The last time Businessday caught up with you, you left a message for the President. Following President Buhari’s re-election, what in your opinion should he priortise over the course of the next 4 years?

For Nigeria to rise above its challenges and break through the shackles, all hands must be on deck. You, me, everybody must play a role. For me, in addition to security, focus for the President is pretty straight forward. The 5-point Big Bang Prosperity Agenda for Nigerians remain:

A. Make the State governments economically viable by allowing them to control their natural assets

B. Galvanise an urgent private sector-led economic revolution on the back of market-friendly legal and regulatory frameworks. We need Jobs! Jobs!! Jobs!!!

C. Champion the programme for massive private and public investments in education. This is the future of Nigeria

D. Drive high healthcare standards galvanised through insurance and pensions

E. Signal private sector investments in infrastructure and housing supply and drive demand with single-digit mortgages

Whilst FMDQ Exchange has taken on the role of a financial market diplomat, showcasing the potential of Nigeria and the opportunities inherent in its financial market to the international community, the government must reciprocate these efforts by setting out key reforms and policy initiatives to support positive transition of the nation’s economy.