The Speaker of the Federal House of Representative, Yakubu Dogara, in company of the committee on capital market, was at the Nigerian Stock Exchange (NSE), in Lagos, last Friday, where he fielded questions on the just concluded capital market conference in Abuja. Kehinde Akinseinde-Jayeoba brings the interview.
How sure are you about the Nigerian Capital Market, what is the government doing to boost investors’ confidence?
There is need for us to deepen the market, but firstly there is a need to create and sustain confidence in the market. For confidence to come back fully into the market, one of the issues to be addressed is the issue of sanctions. People who commit infractions need to be dealt with. In the past that wasn’t the practice. If you recall, the crash in the market did not occasion any serious prosecution to those who perpetrated the fraud and lots of insider dealings, that I can say because I was a member of the committee that investigated what led to the crash in the market then, so I know some of these issues, but we were not able to deal with those who perpetrated the malpractices that led to the crash of the market.
What we are doing now is that we are ammending certain principle enactment with the IAST, ISA 2007, CAMA and some other legislations to ensure that regulators are on top of their jobs and they retain the legal tools and capacity to punish severely pepertrators of malpractices. We would start dealing with this and when our citizens see that there is a transparent line of authority as to when something happens it can be immediately dealt with then confidence will naturally come back.
I’m happy that the council is supporting us because of their engagements today, the development of a complaint process mechanism which got submitted through the executive of the Securities Exchange Commission and eventually make it to the National Assembly so that we can see what we can do about that, but for us to bring back the confidence of investors, people must see clearly that regulators are on top of their jobs. Then a lot of people will come into the market.
What is the government doing about recurrent issue of multinationals, oil and gas and telecoms listing on the NSE?
We sincerely believe that for us to deepen the market, telecoms companies, oil and gas companies need to list, which must be the case.
It’s more unacceptable when they are listed in other countries and they are not listed here. The flow of resources from citizens to the companies is what makes them rich. And as a responsible government, a reasonable part of the profit made could be shared to Nigerians which is the way we can engender economic prosperity.
As part of the Bureau of Public Enterprises sales, there is a clause that companies that are successful should list part of their equities on the NSE, but so far that hasn’t been done.
Now that we have this information we shall look at some of the agreement with these companies and where there are clauses that require them to list on the market and they haven’t done so through the powers of oversight, we would ensure that that is done or that they are penalised in line with the agreement that they signed with the Bureau of Public Enterprise.
But I want to make it very clear that as a responsible parliament and government, we cannot just sit down and say we would continue to do things the way we used to and expect a different outcome. Nigerian is the number one economy in Africa; our stock market must have a corresponding status as number one on the continent. For us to achieve this, even if it means inventing some kind of legislative tools to ensure that this is done, we shall do it.
Once a company is privatised and you are the successful bidder, you must list a reasonable part of your equities in the stock market. And we would follow through to ensure that this is done, we shall do it.
We want to ensure also that is done in respects of spectrums given out. The spectrums given out to telecoms companies before, gladly will elapse very soon, so we would ensure that that is a cardinal requirement, that they must register reasonable part of their equities.
If we do that, I sincerely believe that sooner than later, we would be able to achieve the goal of these companies making huge profit list on our market, and by that, we would deepen the market, and then have resources that we can channel from the market to addressing the critical shortfall that we have in terms of infrastructure. Candidly, without infrastructure, we cannot develop, and a better way of addressing our infrastructure deficit is through raising money from our capital market.
What is the National Assembly doing on the amendment of IST, CAMA and ensuring stakeholders imput?
In the past, there was no synergy between parliament and council, however, we have worked on that and there is a positive synergy between legislature and council. I believe that by utilising that, we can achieve a lot.
Now, we have had cause to craft a master plan, which I believe is commendable in all respect. The implementation of the capital master plan over a ten-year period which has been projected brings no doubt that it will result in the realisation of the full potential of this market.
In order to show how serious parliament is and to underpin the fact that the government places a lot of premium on this market. The Senate President and I, who personally attended a stakeholders’ summit held weeks ago, promised that we will implement the outcomes generated from the stakeholders summit.
We have noted the issues raised and I can tell you that we are addressing these issues through some of the bills before us.
Talking about stakeholders’ engagement, when addressing bills, as part of our process and rules, once a bill scales through second reading, the next process is for a public hearing to be held on it, and the reason why a public hearing is held is to throw the door open to all relevant stakeholders who have the expertise in the field to come and speak to us.
So, when we speak with relevant stakeholders, such dialogue will improve the quality of legislations that will come out from the National Assembly, which would help us to craft legislation that will speak to the yearnings of those sectors in the society.
How many capital market related bills are set before the parliament and what is the level of passage at present?
The truth is I cannot sit and count the amount of bills set before the parliament, but I can tell you that we are not only addressing the issue of the capital market, but we are after the wholistic business environment in Nigeria, and what we did was to constitute a committee of eminent jurors in Nigeria, some of who are senior advocates, so we constituted this team of experts who have been working for close to a year to look at the entire gamut of laws we have relating to business.
With the efforts of this committee, we have passed 85 bills- the highest in a year. We have also taken a total of 235 bills from that committee and if we are able to pass all these bills, we would have been able to clean our statute books and modernise them.
Those laws with ludicrous punishment will be fine-tuned not just on the capital market, but the entire business environment so that we do not continue to lose to our neighbouring countries. We are competing with frontier markets, and if care is not taken, companies will continue to run away from jurisdictions that do not offer a competitive edge and that is what has been happening before. So, that’s what we have been doing from the perspective of parliament and we are committed to doing away with that.
But for the capital market, there are other legislations that were raised today, and I am encouraging them to work on it. We have a duty to the moral compass of the nation to always highlight those areas that we believe that there are shortfalls.