The Securities & Exchange Commission (SEC) and Oando saga is generating commentary from all quarters. There have been appeals for SEC to follow due process in the Oando case from groups as divergent as minority shareholder groups to NGOs to the Institute of Directors and even reputable voices such as Atedo Peterside. The international community has been draweninto the fray with the US – Nigeria Trade Council (UNSC) echoing the same tune, but this time the same message.
The US – Nigeria Council for Food Security, Trade & Investment, the body that promotes opportunities in Nigeria to US investors and advances commercial partnerships which contributes to economic growth of Nigeria, in a press release on 19 June, 2019, appealed to the SEC to sheath its sword in its current feud against Oando PLC.
The Council stated that “Oando PLC, as a founding member of the Council and as an active and valued participant in the Council’s activities, plays an important role in promoting business and direct investment in Nigeria”.
The UNSC went on to say “It is committed to strengthening the commercial relations between the United States and Nigeria, it recognizes the importance that strong capital markets play in attracting foreign investment, creating new jobs and stimulating economic growth”.
This underlines the fact that if a regulatory body for the capital market is perceived to be stifling the market it will have a detrimental effect on the ease of doing business, business growth and sustenance, deter new business and international investment, all of which will eventually translate to economic decline. The USNC further challenged the regulatory body to discharge its duties with due process and fair equitable treatment for all parties.
The role of the USNC cannot be over emphasized, according to the USNC Chairman, Ambassador Terence McCulley in a statement in March 2019 “The US-Nigeria Council (USNC) stands ready to play its role in the most important and dynamic economy on the African continent. As a convener, clearing house and catalyst for investment into Nigeria, the USNC will continue to promote expanded commercial ties between the United States and Nigeria”.
It can be recalled that the Institute of Directors (IoD) at their June 2019 New Members’ Induction agreed to retain a watching brief on regulatory developments especially on the SEC / Oandocase with a view to coming out with learning guidelines around the pain points of the case study when the dust finally settles. At the same event Olufemi Awoyemi, founder / CEO of ProshareNigeria Limited said, “This situation unfortunately is further exacerbated by the lack of, absence and the perception that those empowered to exercise such oversights themselves have serious issues of corporate governance to contend with. So, where do we begin to reset our sovereign corporate governance issues?”
According to United Nations Conference on Trade and Development (UNCTAD), Nigeria – ‘Africa’s giant’ who currently sits on billions of proven oil reserves and a couple more billions worth of investment opportunities in the oil and gas sector – presents an astonishing decline in FDI of 36% in 2018 with FDI inflow into Nigeria declining from a high of $8.9 billion in 2011 to a derisory $2.2 billion in 2018.
This is hardly surprising as Forbes further highlights in a report written in May 2019 that “The equity investment in Nigerian between 2013 and 2018 has fallen from around $2.9 billion in 2013 to $139 million in 2018.” As if this wasn’t bad enough, the Exchange Traded Fund (ETF) has dropped a whopping 74.5% in the last five years. To add fuel to fire, Nigeria’s highly praised, but ridiculously low ranking in the Africa Competitiveness Report by the World Economic Forum of 134th out of 144 countries is something we should no longer brag about.
With these abysmal figures, one must challenge regulators like the SEC and its contemporaries on their important role in reversing such averse figures. Essentially, getting the market back on its feet is vital. The market is disturbed, investors are concerned that there is a capital market regulator that seems to lack a corporate governance structure and seems to apply compliance, fairness and equality as they like, on their own personal discretion as opposed to approved, tried and tested processes and procedures. These calculated behaviors from SEC have long term ramifications, which will affect the country’s image, and increase the perception of a country and people that have a lack of respect for the rule of law.
With the case gaining international attention, there is mounting pressure on both the SEC, and the Federal Government of Nigeria to ensure that the SEC’s treatment of Oando does not serve as a deterrent to the international investing community. We should be portraying to the rest of the world, positivity and potential at time where foreign direct investment is highly necessary to keep the nation afloat.