Mr President, establish a Social Stock Exchange in Nigeria

Your Excellency, President Bola Ahmed Tinubu, I write to you regarding an innovative concept that could significantly boost impact investing and financing for social enterprises in Nigeria—the establishment of a Social Stock Exchange. This is a platform that allows investors to buy shares/stocks of social enterprises, cooperatives, and non-profit organizations working towards addressing critical socio-economic […]

Your Excellency, President Bola Ahmed Tinubu,

I write to you regarding an innovative concept that could significantly boost impact investing and financing for social enterprises in Nigeria—the establishment of a Social Stock Exchange.

This is a platform that allows investors to buy shares/stocks of social enterprises, cooperatives, and non-profit organizations working towards addressing critical socio-economic and environmental challenges. It bridges the gap between ethical investors seeking to generate positive social impact alongside financial returns, and mission-driven organizations in need of growth capital.

Nigeria faces immense development challenges, from poverty and unemployment to healthcare, education, and climate change issues. The government alone cannot solve these issues – we need a vibrant social entrepreneurship ecosystem.

Benefits of this are unlocking new funding from impact investors, improving transparency and governance of social enterprises, creating an exit pathway for pioneering social investors, and building awareness about the social enterprise sector.

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The global precedence is Social Stock Exchanges are operational in countries like the UK, Singapore, Canada, Jamaica, and Kenya. The Impact Investment Exchange (IIX) in Singapore has raised over $100 million for enterprises addressing UN Sustainable Development Goals. Nigeria should not be left behind in this global movement.

I envision a Social Stock Exchange in Nigeria with a two-tier structure: Tier 1: For highly regulated, publicly tradable shares of mature social enterprises and Tier 2: A less regulated platform for private placement of shares in early-stage social ventures.

This model accommodates both institutional impact investors and smaller ethical investors. By supervising listings and reporting standards, we ensure investor confidence and the credibility of social enterprises.

The proposed model includes constitute a steering committee with SEC, NGX, impact investors, and social enterprise representatives; study successful global models and developing a framework for Nigeria’s Social Stock Exchange; secure seed funding from DFIs, donors, and prospective investors; establish the governance, listing, reporting, and trading standards/policies and launch the exchange platform through the Nigerian Exchange Group.

 

Kabiru Adeniyi Adisa FCA wrote via [email protected]