The Federal Government on Monday said it would encourage state governments to raise long-term funds from the capital market to finance capital projects.
It said rather than the states looking at the banking sector to raise funds, the capital market would be assisted to play its role in economic development.
The Minister of Finance, Mrs. Kemi Adeosun, stated these at a meeting with stakeholders in the market, led by the Chairman, Capital Market Master Plan Council, Mr. Olutola Mobolurin.
Adeosun said the assistance to be given to the state governments in raising funds from the capital market had been captured in the Fiscal Restructuring Plan, which was already approved by the National Economic Council.
She said, “There is a very aggressive plan to develop housing; the capital market is sitting at the root of financing the sector and we have to find a way to unlock it
“We need to create the instruments; we need to de-risk certain sectors; we need to look at procedures. At the moment, we are working on the fiscal sustainability plan and one of the things that we are saying to the state governments is that we want to take you away from the banks.
“The capital market should be your natural source of funding for your long-term projects.”
The minister lamented that currently, a lot of people had yet to understand the capital market and what it could do for the development of the country.
“There is a lot to be done on your part around literacy, awareness and stakeholder engagement at every level, especially at the political level, because I am not sure every minister truly understands what the capital market means for his portfolio,” she noted.
Mobolurin said the visit was to seek the support of the minister in driving the Capital Market Master Plan (2015-2025).
He explained that the capital market was usually neglected and had not found the right attention in the government.