Investors seek incentives to boost agro firms’ contributions to GDP, NGX

Investors have underscored the need for the government to rev up the implementation of policies and intervention programmes initiated for the agricultural sector to improve the sector’s productivity and boost their contributions to GDP and overall market capitalisation of the Nigerian Exchange (NGX).

With the development, the sector represents only N300.958 billion of the total NGX market capitalisation, which stood at N23.878 trillion within the period. The companies are FTN Cocoa Processors, Okomu Oil, Presco, Ellah Lakes and Livestock Feeds.

National Coordinator of Issuers and Investors Alternative Dispute Resolution Initiative (IIDRI) noted that the NGX as an important component of the capital market plays a significant role in the capital formation process because of the tremendous opportunities that its activities offer while lamenting that only a few companies under the agriculture sector are listed on the NGX.

According to him, while industry composition is concentrated in a few industries like banks, consumer and industrial goods, the agric and oil & gas sectors which are critical for economic diversification, take up a much smaller proportion.

Therefore, he insisted that something should be done to stimulate activities in the sector, especially in the areas of long-term funding through the capital market to boost the performance of the sector’s listed firms and the commodities exchange.

Furthermore, he also pointed out that a deliberate policy on incentives would attract more firms in the sector to float IPOs and list on the exchange, resuscitate the primary market segment, improve the current illiquidity position, and deepen the market.

According to him, one of the reasons the sector has remained subsistent over the years is that the financing needs for agriculture are quite substantial.

He also called for the introduction of fiscal and monetary policies that would stimulate private-sector investment.

Furthermore, he urged the government and regulators to ensure that the value of listing on the stock market is sufficiently attractive and much more than the cost of being listed, stating that value proposition is crucial in any business decision, especially for private investors.

By Helen Oji

https://guardian.ng/business-services/investors-seek-incentives-to-boost-agro-firms-contributions-to-gdp-ngx/