SEC POISED TO MAKE NIGERIA PREFERRED INVESTMENT DESTINATION
BY PETER EGWUATU
The ongoing implementation of reforms in the Nigerian capital market has shown the determination of the Securities and Exchange Commission (SEC) to not only revive the comatose capital market but to make the country a preferred investment destination.
The SEC, under the leadership of Ms Arunma Oteh has carried out various actions that are capable to reposition the capital market and attract both local and foreign investors in the mid to long term perspective.
Some of the actions that have been taken by the current leadership of the SEC were meant to address issues that affect market integrity, corporate governance, transparency, risk management, etc.
Before now, the SEC appeared to be a toothless bull dog that failed to use its big stick and carry out its mandate as permitted by the law that set it. There had been several market infractions, non transparency, insider dealings, and abuse of office by leaders in the capital market.
But when Arunma assumed office as Director General (DG) of SEC in 2010, things changed, with the implementation of some harsh reforms that halted some market makers and leaders in the market.
No wander, Mr. President, Dr Goodluck Jonathan gave the DG his strongest endorsement for her effort by urging the SEC under her leadership to use any means backed by law to bring all those who abuse the capital market to book.
The determination of the SEC to make the country a preferred investment destination could be seen with the Commission parleying with the Central Bank of Nigeria (CBN), Ministry of Finance, Ministry of Commerce and Investment, Ministry of Power, and National Insurance Commission (NAICOM), Pension Commission (PENCOM), among others during its investors forum to commemorate 50 years of capital market regulation in Nigeria.
However, SEC is not yet 50 years, but the Commission decided to use one long year with series of activities to commemorate 50 years of its regulation in the country. It may interest to know that capital market regulation in Nigeria predates the establishment of the Nigerian Securities and Exchange Commission, thirty-one years ago. The SEC for the first time in the history of the Nigerian capital market launched an investment movie tagged ' Breeze' to educate Nigerians about the importance of investment for raining days.
Speaking at the investors' forum, Arunma said, 'At the SEC Nigeria, we are alive to our mandate of capital market regulation and development. We are building a world class capital market that is deep, dynamic, effectively enforced, protects the everyday investor, rewards correct behavior and is able to adapt and evolve with global economic developments.
Once heavily dominated by equities, our market today prides itself in having one of the fastest growing bond markets in the world. Courtesy of this development, the Nigerian capital market is helping to diversify the Nigerian economy by assisting in the structured financing of the country's huge infrastructural and industrial development. And we are building a more robust investor protection regime. We are building a market that is fair, efficient and transparent.'
In her own speech at the investors' forum, Dr.(Mrs.) Ngozi Okonjo-Iweala, Minister of Finance and Coordinating Minister for the Economy said, ' I am proud that the Nigerian capital market, a key component of our economy, has come this far.
We are gathered to declare to the world that the Federal Government under President Goodluck Jonathan has taken and is taking steps to make our market more attractive than ever before. We have gathered to announce to the world that Nigeria is open for business. We are gathered to tell local and foreign investors that as managers of the Nigerian economy, we are building structures, which block the loopholes in our fiscal and budgetary framework.
As I speak to you, for the first time in our history, we have taken a major step towards the establishment of a sovereign wealth fund to enable us save and invest in time of plenty. The government is determined to improve on the state of our infrastructure by building roads and railway networks.'
Also, Minister of Commerce and Investment, Dr. Olusegun Aganga , said, ' Our Nation is ready to harness its huge potentials. One, we would create a conducive atmosphere for investment in the country by ensuring that our laws and policies are investor-friendly.
'Two, we will pay close attention to the sources of capital for investment both within and outside the country. As you will agree with me, the Sovereign Wealth Fund, which establishment we made a reality, is a potent pool of investible capital.
We also have well over N2.2 trillion in pension funds. With a safe investment atmosphere assured, the potential of the pension fund is boundless. We have to proactively make sure that we unlock capital, go out and make sure that we get investments into our country.
While joining the SEC in celebrating 50 years of capital market regulation, Barth Nnaji, Minister of Power, disclosed that about $50 billion worth of investment is needed from investors to reactivate the power sector.
He also announced that the federal government will provide subsidy on electricity tariff in order to avoid shock in the system, adding that Nigeria has the greatest loss in Gross Domestic Product (GDP) due to power cut.'
Nnaji disclosed government's determination to solving the power problem as a key infrastructure that will help in transforming the manufacturing and other sectors of the economy, just as he commended the Commission in its quest at encouraging investment in power and other sectors of the economy.
According to the Minister of Power, 'Nigeria has moved from 2,500 mega watts to N4,000 mega watts. This is nothing to celebrate when we compare this with what is generated in South Africa, Brazil , China , USA, and other developed countries.
But the thing is that President Goodluck Jonathan has set up a road map towards building the power sector as contained in its transformation programme. In fact, what contributed mostly in the power failure was because of lack of maintenance in our plants, under investment in power, no clear vision, amongst others.'