CMAN Seeks Tax Incentives To Boost NGX Listings

The Capital Market Academics of Nigeria (CMAN) has urged the Federal Government to introduce fiscal incentives to encourage more companies to list on the Nigerian Exchange (NGX).

The President of CMAN, Prof. Uche Uwaleke, made the recommendation on Monday in Abuja at a World Press Conference organised by the association ahead of its second Biennial Conference.

Uwaleke said the incentives should target large indigenous companies and government-owned commercial enterprises to encourage public listing.

He proposed temporary tax incentives for companies undertaking Initial Public Offerings during the early years after listing.

According to him, CMAN also recommends reducing the Company Income Tax for listed companies from 30 per cent to 25 per cent to encourage more public listings, strengthen corporate governance and improve transparency.

He said the proposed incentives would deepen the capital market, expand investment opportunities for Nigerians and enhance corporate disclosure and accountability.

He said, “CMAN believes that a vibrant capital market should not merely serve institutional investors and large corporations. It must become a platform through which ordinary Nigerians, small businesses, start-ups,
state governments and infrastructure developers can access long-term capital at competitive costs.

“To achieve this objective, deliberate policy measures are required to deepen the market, broaden
participation and enhance liquidity. One important area deserving attention is the expansion of the supply of quality listed securities.

“We, therefore advise the Federal Government to deliberately encourage more companies, particularly large
indigenous enterprises and government-owned commercial entities, to list on the Nigerian Exchange.
To support this objective, we recommend the introduction of carefully designed fiscal incentives.

“Companies undertaking initial public offerings should enjoy temporary tax incentives during the early
years following listing. CMAN further recommends that the Company Income Tax applicable to listed
companies be reduced from the current 30 per cent to 25 per cent as an incentive for greater public
listing, improved corporate governance and enhanced transparency.

“Such incentives would not only deepen the capital market but would also widen investment opportunities
for Nigerians while improving the quality of corporate disclosure and accountability.”

Uwaleke commended the Securities and Exchange Commission (SEC) and the NGX for reforms aimed at modernising the capital market.

“We applaud the successful transition to the T+1 settlement cycle, which aligns Nigeria with international best practices by improving market efficiency, reducing settlement risk and enhancing investor confidence.

“These reforms demonstrate the commitment of the regulators and market operators to building a globally competitive capital market capable of supporting Nigeria’s long-term development aspirations,” he said.
He, however, said more needed to be done to improve market liquidity.

“In this regard, we encourage a review of existing free-float requirements, where appropriate, alongside other measures capable of increasing the volume of tradable securities and enhancing market depth,” he said.

Uwaleke expressed optimism that the SEC would soon unveil a new Capital Market Master Plan, describing it as a strategic roadmap for the next phase of the country’s capital market development.

He said the plan would position the market to contribute more effectively to economic diversification, infrastructure financing and inclusive growth.

The CMAN president urged the commission to ensure broad stakeholder consultation in implementing the Master Plan.

He also called for the deliberate involvement of CMAN members in developing actionable strategies arising from the plan.

Uwaleke acknowledged improvements in key economic indicators, including increased investor confidence, a more stable foreign exchange market, stronger external reserves, a more resilient banking sector and record performance in the capital market.

He, however, stressed that the success of ongoing economic reforms should ultimately be measured by improvements in household welfare, business competitiveness, infrastructure, access to affordable credit, job creation and poverty reduction.

He said, “CMAN equally commends the Central Bank of Nigeria for the courageous and coordinated measures it has implemented to restore confidence in Nigeria’s financial system.

“Particularly noteworthy is the successful clearance of over $7bn in foreign exchange obligations
inherited from previous years. This singular action significantly improved Nigeria’s credibility in the
international financial community.

“We also commend the discontinuation of Ways and Means financing of the Federal Government. This
represents an important step towards restoring fiscal discipline and strengthening monetary policy
credibility.

“Furthermore, the successful implementation of banking sector recapitalization is positioning Nigerian
banks to finance larger projects, support economic transformation and compete effectively on the
African continent.

“The reforms introduced in the foreign exchange market have substantially improved liquidity, attracted
foreign capital inflows and contributed to the continued accretion of Nigeria’s external reserves.

“Collectively, these measures have helped restore investor confidence and improve Nigeria’s standing
among international investors.

“It is therefore not surprising that major global rating agencies have responded positively by improving
Nigeria’s sovereign outlook while the country’s international profile has continued to rise.”

ENDS