Financial experts call for re-organisation of Nigeria’s market architecture

… warn against unregulated financial institutions

Stakeholders in the Nigerian Capital Market, asset management and banking industries have called for a rethink of the nation’s economic philosophy and a reset of the financial market architecture. This was part of the major takeaways from the virtual event themed “Zimvest Economy Conversations”, a thought-leadership series of d-igital private wealth and investment management firm, Zedcrest Investment Managers – Zimvest, held recently. Delivering the opening remark, Gbenga Adigun, business head of Zimvest, states that investors are gravely concerned with investment returns in light of the current low yield environment, while financial institutions are thinking of how their product development and service delivery should evolve with the changing needs of investors. Bola Onadele Koko, CEO of FMDQ Group, while delivering the keynote speech on the event theme “The Economic Landscape and Investor Preferences in Postpandemic Africa”, talks about the toll the growing pandemic has had on African markets. He lays emphasis on the slowdown in key segment soft he economy, including the financial markets, tourism, remittances and foreign direct investments. He calls for a rethink of Nigeria’s economic philosophy with clarity from the fiscal policymakers, which will be critical for gaining investors’ confidence. According to Koko, “Now is the time to develop new and ingenious ways to develop and drive the Nigerian financial market and in the continent at large. Private capital will especially be more essential as recent shocks have shown the limits of Governments’ abilities particularly in developing countries.” The capital market leader also state that FX reforms will be critical for the Nigerian economy at this point, noting that trading activity in the Nigerian Fixed-income and Interbank Currencies market is down by 55% due to economic slowdown linked to the Covid-19 pandemic. All panellists in this first episode of the thought-leadership series point out that most investors were affected by the pandemic and are looking for further ways to diversify their portfolios that may end the year on a negative real return. Speaking during the panel session, Abiola Adekoya, wealth expert and EX-CEO at RMB Securities, states that one of the key things that investors are concerned about in this era is the need for diversification, more liquidity and higher investment returns. In her words: “A lot of investors have been focused on one product and this pandemic has shown that that is not enough. The nascent interest in alternative assets have shown that there is strong liquidity in the overlooked retail space and Investment managers should pay keen attention and develop alternative assets products, and reduce the reliance on the traditional Fixed income, Money markets and Equities offerings.”