By Turaki Adamu Hassan
Rt. Hon. Yakubu Dogara, speaker of the Federal House of Representatives, made history on Friday, 8th of July, 2016, when he became the first ever presiding officer of the National Assembly to visit the Nigerian Stock Exchange (NSE) and to sound the closing gong to signal the end of the trading on its floor.
But while his visit was a new development, it is well known that since his emergence as the Speaker of the Green Chamber last year, Dogara has been very active in championing calls for the revival and deepening of Nigeria’s Capital Market.
The NSE is not in its best of times. The market is yet to recover from the global financial meltdown of 2008 which resulted in over N10 trillion being lost by hapless Nigerian investors.
Sadly, efforts to investigate and bring all those responsible for the crash to book for their actions or inactions have been frustrated by powerful forces, leading many Nigerians, especially the middle class, to stay away from the NSE after losing their life savings and pensions to the fraudelent activities of insider abuses and other infractions by some operators.
The situation is worsened by the fact that recent studies have shown that whether in rich or poor economies, there is growing concern over increasing income inequality where incomes of the wealthiest few are rising, whilst the incomes of the majority poor are not just stagnating but declining resulting in growing wealth and income inequality.
Infact, it was Thomas Piketty, who opined that inequalities of wealth and income are influenced by a whole host of institutions especially political institutions because markets, when left to their own devices tend to produce a high degree of inequality.
This explains why wealth tends to accumulate and concentrate at the very top of the income distribution and to tame the worst effects of market inequalities requires active political intervention as is being championed by speaker Dogara.
It is no longer news that over 100 million Nigerians live below the poverty line according to the 2010 report of the National Bureau for Statistics and with the dwindling revenue acruing from oil resulting in non-payment of salaries by 27 out of 36 states, and almost 500 local government councils, it means more Nigerians are being plunged into poverty.
This calls for desperate and urgent measures by political institutions to diversify the economy, create wealth, and reduce income inequality. There is therefore the urgent need to deepen the capital market and make it attractive to the ordinary Nigerian who can eke a living doing daily trading.
Not new to the happenings in the stock market, having served in the committee of the House that investigated the events that led to the crash of the market, Dogara, has continously advocated for measures that will deepen the market and return investors’ confidence.
It is his conviction that democracy, the best system of government ever to be invented by mankind, can only function effectively and deliver on its promises of life, liberty and the pursuit of happiness when wealth is created and deliberately allowed to trickle down to the ordinary people. He believes strongly that this can be achieved through the capital market.
For him, a situation where a large chunk of the nation’s resources or capital is heavily concentrated in the hands of few chief executive officers, CEOs, would further widen the inequality gap, eliminate the middle class and plung more people into abject poverty, thereby posing serious threat to the sustenance and survival of democracy.
He has made it known in different fora that the skewed distribution of wealth is even more worrisome because the flow of resources from Nigerian citizens to multinational companies operating in the country that makes them rich but unfortunately, these same companies, rather than invest in the NSE and grow the economy of Nigeria, would rather repatriate their profits 100 percent to their own countries without investing a dime back to the system.
On many occassions, the speaker has made his position on this sad trend clear, sounding it out to all that care to listen that major extra-ordinary measures will have to be taken by the parliament and indeed all political institutions in the country to compel these large multinational companies with interests in oil and gas and telecommunications to get listed on the NSE.
His argument is simple; foreign telecommumication companies who have been operating in the country since 2001 have not only been declaring huge profits, but are also listed in their countries’ stock exchanges but they have continued to rebuff calls for them to list in the NSE, even though they make most of their profits here.
Furthermore, Dogara has noted that ironically, it is only from the patronage they get from Nigerians that they make this huge profit, which explains why even though Nigeria is the largest economy in Africa, its capital market ranks third-a very big anomaly.
Speaking when he sounded the closing gong of the Nigerian bourse on the 8th July 2016, he said that the parliament would strengthen capital market laws to empower regulators to sanction erring operators.
The Speaker told the market operators that his visit underpins the fact that the House pays serious attention to the Nigerian capital market and that for the capital market to take its rightful place, drastic measures must be adopted.
He said that having rebuffed calls for them to list on the stock market, it was now time to get these companies to comply by adopting the carrot and stick approach.
Dogara also charged the capital market regulators who he said needed to be on top of their responsibilities in order to boost investors’ confidence in the market. To make them more efficient, he continued, regulators will be empowered to sanction operators that arbitrarily abuse the market so as to regain investors’ confidence.
He said it was important to regain investors’ confidence and give them the needed assurance that anyone who perpetuates infractions in the market would be dealt with. According to him, this will also serve as deterrant to others who may want to scam investors in the future.
He further disclosed that insider dealings were the major cause of capital market crash, noting that people that abused the market in the past were not adequately sanctioned.
The speaker said, “We need to deepen the market, we need to create and sustain confidence in the market and for confidence to come back, we need to do more. When we start sanctioning, confidence will come back to the market.”
The speaker received a standing ovation when he told operators on the floor of the NSE that the House would soon pass laws that would compel multinationals, oil and gas companies, telecommunication firms and privatised companies to list on NSE to deepen the market as part of efforts to engender economic prosperity.
One thing that emerged from the speaker’s visit is that unknown to many, most of the public enterprises that were privatised were actually mandated to list certain percentage of their shares on the NSE as part of the sales and purchase agreement. Regrettably, none of the companies listed, in contravention of the sales and purchase agreement they signed with the Bureau for Public Enterprises (BPE).
Dogara, however, assured that the House, through its committee on Privatisation and Commercialisation, will investigate these cases of abuse with a view to getting them to stock to the terms of agreement they had with BPE.
During the visit, Aigboje Aig-Imoukhuede, NSE’s council president, described Dogara’s visit as historic, noting that the House under his leadership had shown concern about the economy and the capital market.
While assuring the speaker that market operators will not relent and would do everything to ensure that the market becomes the best in the continent, Mr. Aig-Imoukhuede said it was very gratifying that Dogara is leading moves to create a conducive environment for the market.
Undoutedbly, the speaker needs the support of all men and women of goodwill to bring his dream of deepening the capital market to fruition. Here, his colleagues, senators and Reps alike must, as a matter of necessity and urgency, consider and treat proposed legislations related to this purpose with the seriousness and urgency they deserve and for the President to assent to the bills when they are eventually passed into law.
Hassan is the Special Adviser on Media & Public Affairs to Speaker Yakubu Dogara