Former Director-General, Securities and Exchange Commission (SEC), Dr Suleyman Ndanusa, yesterday said the nation’s capital market would not witness the expected growth unless the Federal Government embraced quantitative easing.
Ndanusa told newsmen in Lagos, while reviewing the performance of the capital market as the country marked its 59th Independence Anniversary.
‘Quantitative easing’ is a monetary policy adopted occasionally by the government to increase money supply in the economy to further increase lending by commercial banks and spending by consumers.
Ndanusa said the capital market would continue to drag as long as the issue of insecurity persisted and the economy continued to slow down unless government embraced quantitative easing.
“If you see what Ghana is trying to do about its economy, beyond creating an enabling environment like providing power and enhancing security, the government’s fiscal policies must be able to incentivise and make our market very competitive.
“The news that the Value Added Tax (VAT) and other taxes are either being increased or being reintroduced is not good at this point in time.
“These are times that there will be quantitative easing, the government must also come up with policies that will make our own environment competitive,” Ndanusa said.
He noted that portfolio investors moved to other climes instead of Nigeria because of unfavourable economic policies such as charging taxes on dividends and other capital market investments.
“I believe our fiscal policies must be geared towards incentivising and making our capital market a destination of choice.
“Investment in the real sector must be encouraged in a way that at least more existing investments and new investments will come into it and if that happens, that will boost the capital market.