SEC Working On Private Equity Funding Rules, Investment In Start-ups

The Securities and Exchange Commission (SEC), at the weekend said it is working on rules and regulations to ease participation by more Private Equity funds in business ventures and national economic growth, as they bring capital to businesses.
According to the acting Director-General of the commission, Ms. Mary Uduk, there is a nexus between adequate capital and business growth, given the critical role of capital in the growth of businesses, including generating profit for the investors, creating socio-economic benefits to the consumers, and enhancing overall economic growth.
Uduk, who spoke at the second private equity summit with the theme: ‘Drivers, Disruptors and Unlocking Value’, organized by Udo Udoma & Belo-Osagie (UUBO) in Lagos, weekend, said that Private Equity firms are important agents

According to her, Nigeria has lots of startups with robust business plans, many profitable unlisted companies with established cash-generating capacity, as well as public companies with solid customer bases, proven products, and high-quality management.
These businesses and opportunities, she continued, were yearning for investments, a situation PE firms can tap into, improving the investment climate, while ensuring friendly market rules and regulations as well as increased investor education as essential elements for attracting PE investments in Nigeria.
Initiatives for registering and developing the FinTech space in the capital market, she stressed, will also provide good opportunities for PE firms to invest in innovative start-ups operating in the capital market.

“The ISA 2007 empowers the Securities and Exchange Commission to register PE Funds. Based on their scope and the need to attract investors such as the Pension Funds, many PE firms and Infrastructure funds (often structured as PE), file their returns with the Commission,” Uduk said.
Uduk said the capital market provides the most efficient gateway opportunities for PE firms. The NASD Enterprise Portal, as a collaborative development in the market, aims at aiding PE firms to invest in and dispose of eligible companies’ securities in an easy and cost-effective manner.
According to her, as PE activities rise in the country, PE funds can utilize the opportunities provided on our various organized exchanges when exiting their investments. This will increase the quality of our listed public companies while allowing PE firms to benefit from the market liquidity, efficiency and increased participation available on the exchanges.
Uduk, therefore, expressed hope that the outcome of the summit will impact greatly and positively on the PE segment of our market, the capital market in general and our economy as a whole.
In a keynote on ‘fostering an enabling environment for investment in Nigeria’ at the event, Minister of Industry, Trade and Investment, Chief Niyi Adebayo, said the Federal Government will ensure that at least 40% of its expenditure goes into patronizing domestic goods and services. This, he noted, will facilitate local markets access for Nigerian made products.
Government, he noted, realizes that building production capacity alongside strategic partners with strong track records in some priority sectors is a critical success factor.

“Through the Nigerian Investment Promotion Commission, bilateral investment agreements are being modernized with a greater sense of purpose.
“Much of our most recent agreements target countries that align with our ambition of building local production capacity,” he said.
According to him, the government will seek a comprehensive approach to mobilizing capital, incentivizing priority sectors and expanding market access for local producers.
Adebayo said that the government would further enhance the ease of doing business and support the growth of MSMEs.
He said that the ministry had begun implementing a number of key initiatives, including the reactivation of the six special economic zones and the special agro-industrial processing zones project.
“In supporting the growth of MSMEs, we are easing access to capital, deploying shared facilities across the country and facilitating the delivery of tax and regulatory incentives for MSMEs.
“Our priority sectors cut across agriculture, construction and the automotive industry,” Adebayo said.
He said that Nigeria would remain critical to the global economic market as the country prepared for the inevitable rise of the world’s third most populous country.
“This also presents a compelling case for global investors when viewed against the backdrop of the country’s capacity for growth.
“Achieving a GDP per capita rate comparable to South Africa would catapult Nigeria’s GDP to over one trillion dollars.
“The dwindling prospects of oil and our growing population leave us with no choice but to develop a Nigeria that is investor-friendly, export-oriented, high producing and high growth,” Adebayo said.
He said that the government’s primary objective in the present decade was economic diversification and job creation.
“Diversification of our economy, or more precisely government revenues, must accommodate both short and long-term efforts because we no longer have the luxury of time; considering the realities of our growing population and the dwindling prospects of crude oil,” Adebayo said.

Senator Udoma Udo Udoma, the founder of UUBO, stressed the need for private sector participation in the development of the country’s economy.
Udoma said that the government must engage the private sector to ensure economic expansion, noting that the government could not do it alone and needs to create an enabling environment that encouraged the growth of private equity in the country.

Left to Right: Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed (left), in a chat with Senior Partner, Udo Udoma & Belo Osagie, UUBO), Aniekan Ukpaka, at the 2nd Private Equity Summit organized by UUBO; while Managing Partner of the firm, Dan Agbor, and Acting Director-General, Securities and Exchange Commission, Ms. Mary Uduk looks on.

https://investdata.com.ng/2020/02/sec-working-on-private-equity-funding-rules-investment-in-start-ups/