Investors have encouraged the government to foster a national savings culture by providing adequate incentives, which would improve retail investor patronage and market investment.
According to reports, a portion of the current market decline was attributable to foreign investor sell-downs, which were prompted by the nation’s economic outlook being clouded by instability, kidnapping, and recurrent farmers-headers confrontations.
Indeed, they emphasized the importance of increasing domestic savings through an incentivized voluntary method to replace imported capacity.
They maintained that the only way to ensure market stability was to strengthen long-term savings, adding that increasing savings would help speed up development and boost the economy.
Moses Igrude, President of the Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI), suggested that long-term savings will boost primary market activity and drive economic growth, noting that a country’s savings level had a multiplier effect on its investment.
Igrude stated that the government must implement the appropriate incentives to encourage more individuals to save for the long term and increase market investment activity.
Furthermore, he stated that the government should look into ways to reduce the impact of foreign portfolio investors in the Nigerian capital market by promoting domestic participation.
Godwin Anon, Chairman of the Standard Shareholders Association of Nigeria, said that market participants must also explore other techniques and mobilize savings to increase liquidity in the market.
“The market is nose-diving now because there is no liquidity. There is no support for the market again because of illiquidity. There is a need for a proper national savings plan that would enable people to put money aside for investment and be sure they get some kind of incentive that will make them take up that policy. We do not have good savings culture and we need to develop one.”
An independent investor, Amaechi Egbo explained that if there were no savings, there would be no investment.
“In basic economics, if there are no savings, there will be no investment. So people are encouraged to develop a savings habit. Saving should be a habit. If you pay me one million nairas, if I cannot save, if I am paid N10 million, I cannot save also.
He argued that Nigerian workers needed to embrace the culture of savings to provide more viable exit plans in the face of voluntary or compulsory disengagement.
He went on to say that these savings would be invested in the stock market, where the investor could track the stock’s movement and performance and make an informed investment decision.
It is a culture that needs to be developed and once it is developed in Nigeria, we will have enough savings and can now channel these savings to invest in the capital market and other areas of the economy.
We advise professionals and other workers to invest in the stock market where they do not need anybody to monitor their investment. They can monitor their investment by themselves.