“I’ve been a big supporter of the transformation in the agricultural space because we have credible leadership, credible programmes and structures that are coming in place and we can see results,” Nigeria Stock Exchange (NSE) CEO Oscar Onyema told CNBC Africa on Wednesday.
“It was quite exciting to know that a Nigerian Economic Summit group has decided to focus on agriculture in this year’s summit, but what is also interesting is that agriculture links into the various other sectors, because we’re looking at agriculture from an entire value chain perspective.”
The 19th Nigeria Economic Summit, which is currently underway in Abuja, has emerged as the most important platform for public-private dialogue on economic issues. This year’s summit focuses on long-term funding and infrastructure solutions for the country’s agricultural sector.
Nigeria’s agriculture sector cannot rely predominantly on short term borrowing and Nigeria’s capital market has been looked at as a good alternative for long term funding.
“There are multiple channels to having exposure in agriculture: listing companies is one. You have a number of private equity and venture capital, and obviously the banks as well. We all need to do more because no one sector can finance the agriculture revolution that we’re seeing,” Onyema explained.
Agriculture accounts for 30 per cent of the country’s GDP and is a substantial job creator. The NSE plans to encourage larger firms in the agricultural sector to list on the stock exchange as a means of attracting more financing to the sector.
“We’ve always said that agriculture should be a key area for us to attract companies. A key takeaway is to go back and we double our efforts to attract more companies into the small to medium market, especially focused on the agriculture sector,” said Onyema.
“If there can be constructs where you actually have large issuances of bonds at lower interest rates because of credit enhancers, that would enable intermediaries to give more loans to the smallholder farms at affordable interest rates. We’ve made a lot of changes to our listing requirements to make it attractive for companies that want to have access the market.”