The Speaker, Federal House of Representatives, Yakubu Dogara, visited The Nigerian Stock Exchange (NSE) where capital market journalists engaged him on a wide range of issues on restoring investor confidence to the bedraggled market.
The lawmaker said that the most important way to restore confidence is by empowering The Exchange with laws to punish market infringement. Assistant Business Editor, KELECHI MGBOJI, brings excerpts of the interaction.
What is your impression about the Nigerian Capital Market and what is the present government doing to boost investor 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 capital market, there was no serious prosecution against those who perpetrated the fraud and lots of insider dealings. I can say something about that because I was part of the members of the committee that investigated what led to the crash in the market in 2008.
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 amending certain principal enactments with the Investment and Securities Act (ISA), Companies and Allied Matters Act (CAMA) and some other legislations to ensure that regulators are on top of their jobs and they retain the legal tools, capacity to punish severely perpetrators 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 and then confidence will be restored.
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 (SEC) and eventually gets to National Assembly and we will see what we can do about it.
For us to regain 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.
How do you go about compelling multinationals, oil and gas and Telecommunication companies listing on the NSE?
We sincerely believe that for us to deepen the market this must be the case. Telecommunication companies, oil & gas companies need to list on our stock exchange. It is unacceptable where they are listed in other countries and they are not listed here in Nigeria. The flow of resources from citizens to the companies is what makes them rich. A reasonable part of the profit must be shared to Nigerians and I think that is the way we can engender economic prosperity.
As part of Bureau of Public Enterprise (BPE) sales there is a clause that companies that are successful should list part of their equities in the NSE, but so far that hasn’t been done. What’s your take?
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 a responsible 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, we have to put in place necessary tools, even if it means inventing some kind of legislative tools to ensure that this is done.
Once a company is privatised and you are the successful bidder, you must list a reasonable part of your equities on the stock market. And we would follow through to ensure that this is done
We want to ensure also that it is done in respect of spectrums given out. The spectrums given out to telecoms companies before, gladly is going to 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 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.
On the amendment of ISA and CAMA Acts, are you considering other stakeholders engagement?
In the past there was no synergy between parliament and council. However, we have worked towards that and there is a positive synergy between legislature and council. I believe that we can achieve a lot by utilising that synergy now that we have cause to craft a master plan, which I believe is commendable in all respect. The implementation of the capital master plan over a 10 year period which has been projected brings no doubt that it will result in the realisation of the full potentials 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 myself who personally attended a stakeholders summit held weeks ago, promised that we will implement the outcome of the 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.
Can you tell us some of the capital market related bills set before the parliament?
The truth is that 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, we are after the holistic business environment in Nigeria, and what we did was to constitute a committee of experts in Nigeria, some of whom are senior advocates.
So we constituted this team of experts who have been working for close to a year to look at the entire laws 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 status nooks 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 in competition with other frontier markets, and if care is not taken, companies will continue to run away from our jurisdiction that do not offer a competitive edge and that’s what has been happening before now.
So from the perspective of parliament that’s what we have been doing and we are committed to doing away with non-competitive business environment.
But for the capital market, there are other legislations that were raised recently, and 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.
What legislation do you have on railway privatisation?
The report on the railway act has been taken, the public hearing has held. The report is there and very soon we are going to have a new railway act.
I know there are opportunities for private participation and once that is passed, private individuals and businesses can then build and own railway systems in Nigeria, and they can do that by raising capital from the capital market. This, I believe, will further deepen and put more resources in the capital market.
