The Texas Stock Exchange (TXSE) is making bold moves to position itself as a formidable challenger to the long-established financial platforms in New York, such as the New York Stock Exchange (NYSE) and Nasdaq. In a significant step toward its anticipated launch next year, the exchange announced on Monday the formation of its board of directors, drawing experienced industry leaders from both regulatory and corporate backgrounds.

This development is part of TXSE’s larger ambition to create a national stock exchange that could potentially disrupt the decades-old dominance of Wall Street.

TXSE first gained attention in June 2024 when it announced plans to officially register with the U.S. Securities and Exchange Commission (SEC), a requirement for national stock exchanges in the U.S.

Key Backers and Financial Muscle

The exchange has already secured backing from two of the most influential names in finance: BlackRock, the world’s largest asset manager, and Citadel Securities, a global market-making firm that has become a powerhouse in the world of trading.

The combined weight of these backers, along with TXSE’s initial funding of around $120 million, provides the platform with a strong financial foundation to compete with the likes of NYSE, which is a division of Intercontinental Exchange (ICE), and Nasdaq.

A Powerhouse Board

Heading TXSE’s newly formed board is Rick Perry, former governor of Texas and U.S. energy secretary. Perry’s involvement adds political clout and experience navigating high-level regulatory environments, both of which could prove advantageous as the exchange seeks approval from the SEC and other regulatory bodies.

Perry is joined by several high-profile figures, including Rick Roberts, a former SEC commissioner, who brings a deep understanding of the regulatory landscape and how the SEC functions—a critical asset for a new stock exchange looking to break into the highly regulated U.S. financial markets. Alex Bussandri, the global head of strategy at Citadel Securities, also takes a seat on the board, adding strategic depth from one of the world’s most advanced trading firms.

Seasoned Leadership Team

To further bolster its credentials, TXSE has drawn top talent from other major exchanges and trading platforms. Notably, Cam Smith, who has been appointed global head of trading and co-president of the exchange, has a wealth of experience in electronic and automated trading systems. Smith previously served as president of Quantlab, a firm known for its cutting-edge, algorithm-driven proprietary trading. His role at TXSE will be central to shaping the exchange’s technological infrastructure, which is expected to focus heavily on speed, efficiency, and innovation, key aspects of modern-day trading.

Another pivotal figure in TXSE’s leadership team is Jeff Brown, who is serving as general counsel and chief regulatory officer. Brown is no stranger to high-stakes regulatory environments, having previously worked as acting general counsel at Charles Schwab, one of the largest brokerage firms in the U.S. His role will be crucial in steering the exchange through its SEC registration process and ensuring full compliance with U.S. securities laws. Brown’s experience also provides TXSE with a regulatory safeguard, which will help the platform gain the trust of investors and traders.

The Need for Competition in U.S. Stock Exchanges

The introduction of the Texas Stock Exchange could mark a significant moment in the evolution of the U.S. financial markets, which have historically been dominated by the NYSE and Nasdaq. While these two platforms have set the standard for trading equities for decades, critics have argued that the U.S. stock exchange landscape could benefit from greater competition, especially given the consolidation of trading power in a few hands.

TXSE’s attempt to rival these behemoths comes at a time when market participants are increasingly seeking alternative platforms that can offer lower trading fees, faster execution times, and more transparency. NYSE and Nasdaq have faced criticism in recent years over issues such as high listing fees, complex market structures, and what some market participants view as a lack of innovation.

The Texas Stock Exchange could capitalize on these market inefficiencies by offering a fresh, streamlined alternative that is more agile and responsive to the needs of modern traders. The involvement of Citadel Securities, a leader in market-making and electronic trading, suggests that TXSE will heavily emphasize cutting-edge technology and algorithm-driven trading—a crucial factor in attracting both institutional and retail investors.

A Texas Identity in the Financial World

While NYSE and Nasdaq have long been synonymous with Wall Street, TXSE’s emergence underscores a broader trend of decentralization in the U.S. financial markets. Texas, with its business-friendly policies, low taxes, and rapidly growing tech sector, has become an increasingly attractive location for major corporations, particularly in finance and technology.

The state’s appeal was made evident during the COVID-19 pandemic when companies like Oracle, Tesla, and HP relocated their headquarters from California to Texas. The world’s richest man Elon Musk has also made the State the headquarters of some of his companies, including X, which he recently moved from San Francisco.

Rick Perry’s presence on the board highlights Texas’ potential to become not just a national but a global financial hub. Perry, a longtime advocate of Texas as a business-friendly environment, will likely leverage his extensive network and political influence to promote TXSE as a major player on the world stage.

The Market Comes with Challenges

While TXSE’s ambitions are lofty, it faces significant hurdles. The U.S. stock exchange market is highly competitive and deeply entrenched, with NYSE and Nasdaq enjoying the advantage of decades of trust, liquidity, and infrastructure. Building the same level of trust and attracting major companies to list on TXSE will require time, effort, and an aggressive marketing strategy.

Moreover, the exchange will need to navigate a complex regulatory landscape. While TXSE is backed by experienced figures like Rick Roberts and Jeff Brown, its application to the SEC will undergo intense scrutiny. The SEC will want to ensure that the new exchange adheres to stringent market rules, offers investor protections, and has the necessary financial and technological resources to function without disrupting the market.

There is also the challenge of attracting both companies and traders to the platform. NYSE and Nasdaq offer liquidity and a broad investor base that new exchanges struggle to match. However, TXSE’s strategic partnerships and its emphasis on advanced trading technology could help it stand out as a more nimble alternative, particularly for tech-driven companies and investors.

Nigeria is wasting time asking states to organize elections. I have never supported that thesis because in the next 30 years, Nigeria will likely not mature to the level where governors could be trusted to organize free and fair elections for local government chairmanships. That is also the reason why I am not in support of state police since if you do that, the state police will become an extension of the governor’s political infrastructure.

I had written: “I am not in full support of State Police as our democracy is still immature to allow some governors to have full control of the Police. If that should happen, forget any opposition at the state level. Rather, I support Regional Police, like Southeast Police Force, under the control of the 5 governors with quarterly rotating chairmanship.”

Extending that thesis, I call the National Assembly to update the constitution so that we can have a Southeast Independent Electoral Commission (SEIEC), Southwest Independent Electoral Commission (SWIEC), etc if we do think INEC cannot handle these state-level elections. For each of these state-level commissions, no governor will have the exclusive control and apparatus to run the show. But if we ignore this position, we will be wasting time thinking that state capitals can be different from local government headquarters!

Anambra State just returned APGA to all local governments in the state. In Imo State, APC cleared the chairmanship positions in all local governments. Across the nation, the governor’s party runs the tables. You may say it does not matter but remember: the absence of evidence is not an evidence of absence. Simply, these results are not typical when you remember that every state has opposition strongholds, so when one party wins 100%, you will understand that a special apparatus is at work.

But putting these systems at geopolitical level, you dilute the influence of state governors. Of course, you may ask: why not ask the INEC to run this show? A better question except that INEC seems to bill like expatriates, and most regions will like local rates!

Nigeria don collect again from World Bank: “The World Bank has approved three significant projects for Nigeria, providing a total of $1.57 billion in financing. This latest funding, announced in a statement by World Bank Nigeria on Monday, September 26, 2024, is aimed at addressing challenges in education, healthcare, and climate resilience while enhancing critical infrastructure for irrigation and dam safety.”

With this, one can posit that recent reforms could not generate the revenue needed to deal with some of these sundry issues. Recall that when the floating of Naira was announced, the plan was to save $billions. And when the petrol subsidies followed, more $billions were to follow on the saving column. So, for the government to take this path, it does mean that the modeled revenue expectation did not come as planned.

If that is the case, the government needs to re-evaluate its model, to see if in the mid-term, there could be a reversal, or if this will be a hopeless expectation, even in the long-term for these policy anchors.

As always, debt is not necessarily bad in business or nation building. The real issue is what you are borrowing for. I preach borrowing to build capacity to produce tomorrow, and not to consume. Good luck, Nigeria.

The World Bank has approved three significant projects for Nigeria, providing a total of $1.57 billion in financing. This latest funding, announced in a statement by World Bank Nigeria on Monday, September 26, 2024, is aimed at addressing challenges in education, healthcare, and climate resilience while enhancing critical infrastructure for irrigation and dam safety.

The package includes a $1.5 billion loan and a $70 million grant and is part of the World Bank’s broader strategy to improve key sectors in Nigeria, including human capital development, governance, and water management. The move highlights the bank’s ongoing commitment to help Nigeria navigate its social and environmental challenges while driving improvements in productivity and reducing poverty.

Project Breakdown

The $1.57 billion will be allocated across three major initiatives, each targeting critical areas of Nigeria’s development:

HOPE-GOV Program: $500 Million for Governance in Health and Education

This program will receive $500 million to address governance challenges in the education and healthcare sectors. By improving financial and human resource management systems, the program aims to enhance transparency and accountability in these sectors, ensuring that essential services reach vulnerable populations.

Poor governance has long plagued Nigeria’s education and health services, where resource mismanagement and corruption have hindered service delivery. The HOPE-GOV program is designed to address these issues head-on by reforming management structures and making services more accessible, particularly to low-income families who have been historically marginalized.

HOPE-PHC Program: $570 Million for Primary Healthcare Strengthening

The Primary Healthcare Provision Strengthening Program (HOPE-PHC) is set to receive $570 million to revamp Nigeria’s primary healthcare services, focusing on improving outcomes for women, children, and adolescents. With Nigeria grappling with some of the highest maternal and under-five mortality rates in the world, the program will provide much-needed support in reproductive, maternal, newborn, child, and adolescent health services.

A combination of $500 million in International Development Association (IDA) credit and a $70 million grant from the Global Financing Facility (GFF) will fund the program. Contributions from organizations like the UK Foreign, Commonwealth & Development Office (FCDO) and the Children’s Investment Foundation Fund (CIFF) will help finance sustainable healthcare initiatives, particularly in underserved areas where quality health services are often inaccessible.

The World Bank estimates that this project will benefit over 40 million Nigerians, helping to reduce mortality rates and improve the overall resilience of the healthcare system.

SPIN Program: $500 Million for Sustainable Power and Irrigation

The third major project, known as the Sustainable Power and Irrigation for Nigeria (SPIN) program, will receive $500 million to enhance Nigeria’s climate resilience through improved dam safety and irrigation infrastructure. This initiative aims to protect Nigeria from climate-induced disasters, such as floods and droughts, which have negatively impacted agriculture and rural livelihoods in recent years.

The project will also expand Nigeria’s irrigation systems, benefiting farmers and livestock breeders across the country. With around 950,000 people expected to benefit directly, the SPIN project will not only boost agricultural productivity but also support Nigeria’s long-term energy strategy by developing a hydropower generation master plan. This plan will facilitate the public-private partnerships needed to increase energy production and enhance national energy security.

Tackling Nigeria’s Governance and Human Capital Challenges

In the announcement, Dr. Ndiamé Diop, the World Bank’s Country Director for Nigeria, underscored the importance of investing in Nigeria’s human capital, emphasizing the need to address governance weaknesses in critical sectors such as healthcare and education.

“Effective investment in the health and education of Nigerians today is central to increasing their future employment opportunities, productivity, and earnings, while reducing poverty among the most vulnerable,” Diop said.

He highlighted the need to improve access to high-quality services for women and girls, who face the greatest barriers to healthcare and education in Nigeria.

The SPIN program, Diop added, will play a crucial role in protecting Nigerians from the effects of climate change while boosting hydropower generation, contributing to the nation’s long-term sustainability.

Concerns Over Debt and Project Implementation

While this financing marks a critical step in addressing Nigeria’s developmental challenges, it also raises concerns about the country’s rising external debt. Under the administration of President Bola Tinubu, Nigeria has secured a total of $6.52 billion in new financing from the World Bank. However, there are concerns about how effectively these funds are being utilized, as Nigeria continues to struggle with external debt servicing.

As of July 31, 2024, Nigeria had received only 16% of the loans earlier approved by the World Bank under Tinubu’s administration. Out of the $4.95 billion initially approved, just $774.99 million had been disbursed.

Additionally, data from Nigeria’s Debt Management Office (DMO) shows that the country owed the World Bank $15.59 billion as of March 31, 2024. This growing debt burden has led to increased scrutiny over the government’s borrowing practices, with critics warning that the high cost of debt servicing could undermine Nigeria’s long-term economic stability.

Debt service costs gulped a staggering 74% of the federal government’s retained revenue in the first quarter of the year, according to data from the Central Bank of Nigeria.

This situation has created concern over every government’s attempt to borrow, especially as oil production, Nigeria’s major source of revenue, has been in decline. Critics have noted that the government has been borrowing for consumption for about a decade now – creating a debt crisis that will likely jeopardize the economy in the future.

Against this backdrop, the World Bank has been urged to prioritize effective implementation to ensure that the benefits of this funding reach the intended populations.