Stakeholder engagement to address policy changes in the capital market—Popoola

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According to the CEO of Nigerian Exchange Limited (NGX), collaborating and engaging with capital market players will help address several policy changes affecting the market recently. Mr Temi Popoola,

Popoola, who revealed this during the Nigerian Economic Summit Group (NESG) Fiscal Policy Roundtable held virtually yesterday, hailed the economic policy stance of the current administration, citing the adoption of the Petroleum Industry Act (PIA) and Finance Act 2021 as indications of the government’s commitment to generating non-oil revenue in the country.

Speaking at the webinar titled “Impact Assessment of the Finance Act 2021” organized by the Nigerian Economic Summit Group, Popoola pointed out that the principles of the Finance Act 2021 bring much more clarity on investments such as the Real Estate Investment Trust (REIT), Capital Gains Tax (CGT) and Securities Lending Transaction.

Investing in real estate investing, he pointed out, brings a lot of potential gain and that “if you look at our market today, our whole asset class is helping to build investor confidence.”

Further emphasizing the direct impact of the law, Popoola said the introduction of capital gains tax on transactions above N100 million is a welcome development in line with the government’s desire to increase the tax bracket.

However, he said the policy could have the negative effect of discouraging high-end investors, including institutional investors.

He noted that retail investors were the main market drivers in 2021 and fell well below the 100 million naira cap, this policy should boost the participation of people in this category.

He also noted the potential macroeconomic effects of the finance law, including the introduction of excise duties on soft drinks, school tax and the potential impact on the ability of the entities concerned to raise capital and disburse dividends to investors, citing the timing and the recovery of the economy as factors likely to influence this situation.

He said that overall the law serves to stimulate the capital market and the economy, reiterating NGX’s commitment to adhere to government policy and stimulate capital market growth.

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