By Omodele Adigun
In recent times, Nigeria has consistently hit rock bottom on Ease of Doing Business in the World. No thanks to the archaic business laws that still litter our statute book. According to Yakubu Dogara, the Speaker of the House of Representatives, this does not offer competitive edge to companies doing business in the country.
Dogara, who was at the Nigerian Stock Exchange, Lagos, on working visit recently, warns: “We are competing with frontier markets. If care is not taken, companies would always run away from jurisdictions that do not offer them a competitive edge”.
In an interface with the media, he delved into the efforts being made by the National Assembly to rid the statute book of obsolete laws that impede business facilitation.
Excerpts.
Obsolete laws
Talking about the number of bills relating to the capital market before the National Assembly, I don’t think I can sit down and be counting them. But I can tell you that we are not just addressing the issue of the capital market. We are trying to look at wholistic business environment in Nigeria. And what we did was to constitute a committee consisting of eminent jurists in Nigeria; some of them Senior Advocate of Nigeria (SAN). Some of them have written a lot. I read some of their books while I was in school studying Law. We constituted this team of experts, they have been working close to a year, to look at the entire gamut of laws that we have relating to business, whether they are capital market related or other areas of business. And I can tell you, at the end of the day we have to expand their mandate to clean all the statue books in Nigeria since 1800. So you will notice that, for the first time in the history of the House, we read 130 Bills in a day.
At the end of first year, we were able to pass a record of 85 bills within one year. It never happened before. But the credit goes to this committee of eminent jurists that are working with the parliament. Some of them have sacrificed many things, including their time, their comfort working day in day out on some of these legislations, looking at the areas that are obsolete and making recommendations to the Parliament for either their repeal or ways we can renew them. Right now, we have taken a total of about 235 bills from that committee. And when we are able to pass all these Bills, believe me, we would have been able to clean our statute books and modernise them. All those laws that you break and the punishment is in Pound Sterling will no longer be there.
Comparatively, right now in Nigeria, we have laws whose punishment is in Pound Sterling or when it is in N2, N4 or N5; very ludicrous kind of punishment. So this is what we are doing, and it is not just on Capital Market but the entire business environment so that we don’t continue to lose the competitive edge to our neighbouring countries. We are competing with frontier markets. If care is not taken, companies would always run away from jurisdictions that do not offer them a competitive edge. And that was what has been happening before. So from the perspective of the parliament, we want to do away with that. And we are committed to doing that. But for the capital market, it is only legislation they raise today. And I am encouraging them to work on it and I believe that as a responsible organisation, we have a duty to be a moral compass of the nation. We will always highlight those areas that we believe there are shortfalls. You see, in life, we should never shy away from our responsibilities or even from controversies. It is necessary for progress. And we don’t want to hide our inadequacies. It is by exposing them that we learn. It is when you expose them that we can make progress. But in a situation when you have very docile citizenry that are involved in songs of exhortation instead of looking at areas where things can improve, then we will continue to diminish, even as individuals, as a nation. But it is always through the clash and compromise that progress is made. So we will always welcome criticisms. We will never hide our inadequacies, if you highlight them, the better we are.
Investors’ confidence
I think what we should do is to address the issue of sanctions. If the market retains the capacity to deal with those that abuse contract, then definitely something would be done. In the past, that has not been the practice. Recall the crash in the market did not occasion any serious prosecution of those who perpetrated the fraud.
I said that because I was a member of the committee that investigated what led to the crash so I know some of these issues. We were not able to deal with those who perpetrated the malpractices that led to the crash in the market.
But what we are doing right now is that we are amending certain principles in our enactment. The Investment and Securities Tribunal (IST), Investment and Securities Act (ISA) 2007, Companies and Allied Matters Act (CAMA) and some other legislations to ensure that the regulators are on top of their jobs. At least to attain the legal tools, the capacity to be able to punish severely those who perpetrate the malpractices at the market, those stockbrokers who are fraudulent.
When we start dealing with this, then our citizens will see that there is transparency on the part of the authority, that if something happens, it can immediately be dealt with. Then investors’ confidence will come back. But for us to rein in the confidence of the investing public,, we must see clearly that the regulators are on top of their job.
If that happens, a lot of people will come back to the market.
Listing telecoms, oil companies
I have spoken almost two times on this. We sincerely believe that, for us to deepen the market, the telecom companies, oil & gas companies should list on the market. It is not unacceptable that they are not listed or quoted on the Nigerian market, but they are quoted elsewhere. The flow of resources from the citizens to these companies is what makes them rich; it is what gives them profit. And we believe that as responsible government, we have to develop mechanism through which, even if it is not all the profits they make that is distributed to the stakeholders, most of whom must be Nigerians, but at least a reasonable part of the profit should be shared to our people. That is the only way we can engender economic prosperity on behalf of our citizens. So we must do this.
In the past, it was said but I don’t know why it was not followed through. I was made to understand that as part of Bureau of Public Enterprises (BPE) sales, there is clause there that states that companies that are successful should list some parts of their equities on the market. But that has not been done. I cant say why that has not been done. Now that we have that information, we will look at the agreement with some of these companies. And where there are clauses that require them to list on the market, and they haven’t done so, through the power of oversight, we would ensure that that is done or they are penalised in line with the provisions of the agreement that they signed with the BPE.
I want it to be very clear that as a responsible parliament, and as responsible government, we cant just sit down and continue to do things the way we are doing things and expect a different results. Nigeria is the number one economy in Africa, our stock market must have corresponding status as the number in Africa. There is no way we can get there if the major players who make reasonable profit and just share it for few people continue to do that. The market will never be deepened; we can never get to the number one position in Africa.
So for us to achieve that, we will do it even if it means inventing some kind of legislative tools to ensure that that is done. For instance, there is an ongoing discussion of strenghtening those clauses in BPE itself henceforth to ensure that we emphasize them. Once a company is privatized and you are the successful bidder, you must list a reasonable part of your equities in the market and we will follow through to ensure that that is done. We want to ensure also that that is done in respect of spectrum that will be given out. Spectrum given out to telecoms companies before is going to lapse very soon. So we will ensure that it is the cardinal requirement that they must register some reasonable part of their equities on the market. So, if we do that, I sincerely believe that sooner than later, we will be able to achieve the goals of listing some of these companies that are making huge profits on our market. And by that, we can deepen the market. With that we would now have resources that we can channel to address the critical shortfall that we have in terms of infrastructure. Without infrastructure we can not develop. The better way of addressing our infrastructure deficit is by raising money through this market.
Railway Bill
The report on the railways bill has been taken. The public hearing has been held. The report is being awaited from the Committee. So sooner than latter,we are going to have new Railways Act. I know this is an opportunity for the private participation in that. Then private businesses can then build railways in Nigeria. They can, of course, do that by raising the money from the capital market. That can further deepen and put more resources into the market.
Until there is an amendment to the present Railway Act, a change to the legislation, it will be very difficult for private sector participation in the railway sector. That is what we will achieve. We are still talking about change. That means we have to change even ways we have been doing things. We are committed to this one
NASS Capital market summit
I want to first thank the President of the Council of the Nigerian Stock Exchange, the CEO and other members of the council for the work they are doing. I guess part of the problem we were having in the past was that we didn’t have that kind of synergy where the parliament would synergise with council on the way forward. They have worked through that. And I can tell you there is a positive synergy now between the legislature and the council of the NSE. I believe utilising that, we can achieve a lot.
Now you have cause to craft a Masterplan, which I believe is commendable in all respects. If it is implemented over a 10-year period, there is no doubt that it would result in the realisation of the full potentials of the capital market.
Now you spoke about the stakeholders’ conference that took place some weeks ago. I know that there was a Communique that came out at the end of the conference. But it only shows how serious parliament is, to agree with the fact that the government places a lot of premium on the capital market. The Senate president as well as myself personally attended the forum and we promised that whichever outcomes generated from the Stakeholders’ Summit, we would ensure that we implement them if it relates to what we can do as parliament. We have noted the issues that they have raised. And I can tell you that we are addressing them through some of the Bills that are before us.
Obviously, as part of our processes and rules, once a Bill scaled through second reading, the next process is for public hearing to be held on it.The reason why we hold public hearing is to throw the door open to all relevant stakeholders who have the expertise on the field to come to the parliament and speak to us.Now you will agree with me that we dont have the expertise at the National Assembly. Even where we have it, it is limited. And so when we speak to relevant stakeholders in that field, it improves the quality of the legislation that would come out from the National Assembly. So the ISA is there, the IST is there; CAMA is there.I believe public hearings would take place very soon in the most cases. Notices of hearing in all cases-it is a fundamental requirements that notices are published in three dailies, including one circulating locally and two national dailies.We enjoined all the stakeholders including the media to disseminate that to them to ensure that they avail themselves of the opportunities to give us their expertise so that we can craft legislation that will address the yearnings in those sectors in the society.