Nigeria partners AfDB to develop green bond market
The Securities and Exchange Commission and African Development Bank Group have signed an agreement on the Nigeria risk-based supervision framework implementation and capacity building project.
The signing ceremony, which took place on Friday, also featured the Nigerian Stock Exchange, which will collaborate with SEC and other industry experts to implement initiatives aimed at promoting green bond market development, according to a statement by the bourse.
It said the AfDB would provide technical assistance as well as a grant from the Capital Market Development Trust Fund – a multi-donor trust fund – administered by the AfDB for the development of African capital markets.
Speaking at the signing ceremony, the Senior Director, AfDB Group, Mr Lamin Barrow, said, “We are very delighted to sign this agreement, which enable us accelerate the implementation of key initiatives.
“The grant will enhance the capacity of the SEC in risk-based supervision framework for the financial and securities market, strengthen operational readiness in the areas of risk-based publishing, derivatives and green bonds trading market.
He said the grant would provide capacity building and training programmes for the NSE, issuers and institutional investors on green bonds, as well as market operators and regulators from the wider Economic Community of West African States region.
“Experience has shown that countries with developed domestic capital markets have posted stronger economic growth and structural transformation and that is why AfDB Group is supporting the emergence of a well-functioning and resilient financial and capital market in African countries through various mechanisms,” Barrow added.
The Director-General, SEC, Mr Lamido Yuguda, said, “The SEC is focused on capacity development as a catalyst to drive the actualisation of the 10-Year Capital Market Masterplan 2015 – 2025.
“Consequently, the SEC designed a targeted training programme to address gaps in regulation and market development to enhance the commission’s readiness to effectively regulate new products and promote the growth of the capital market.”
According to him, some of the initiatives include the procurement of surveillance solutions, capacity building in the areas of risk based supervision, green finance and derivatives.
Yuguda said, “Realising these focus areas align with AfDB’s high five priority sectors for the economic transformation of Africa, we leveraged our strong partnership with AfDB to drive some of these key initiatives to strengthen internal and issuers’ capacity.
“We are pleased and thankful to AfDB for providing the grant and supporting in the execution of this project. We believe your support and our collaboration underscore the commission’s and the banks mutual goal to grow the capital market and create viable avenues for sustainable economic growth for Nigeria and the region.”
On his part, the Chief Executive Officer, NSE, Mr Oscar Onyema, said under the initiative, SEC, in collaboration with the NSE, would work with industry experts to develop a tailored green bond issuance framework template for the Nigerian market.
He said they would enhance the capacity of market operators and build the in-house regulatory capacity of the commission and the Exchange in the sustainable finance space.
He said, “The NSE continues to champion the development of a sustainable capital market and we are confident that this technical assistance will further catalyse the growth of supply and demand side of Nigeria’s sustainable finance market.
The Nigerian green bond market received international recognition following the issuance and listing on the NSE of the N10.69bn Federal Government sovereign green bond in December 2017, according to the statement.
