Reading the lips of securities dealers – Part 2

The gross neglect of the professionals’ voice has created trust deficit in their dealing with the Federal Government. It is ironic that Securities Dealers are not represented on the Monetary Policy Committee (MPC) where the CBN determines issues that has impacts the financial market. This explains why the MPC seems to mainly serve the interest of the money market. The apex capital market regulator, SEC, which ought to demand for such a representation appears handicapped until it becomes fully independent. Some of its roles have been hijacked by the CBN whereas SEC is no longer the ancient Capital Issue Commission, a former Department in the apex Bank. As part of their contributions to Nigeria’s economic.

On the 19th of this month, Securities Dealers shall converge at Transcorp Hilton, Abuja to renew their call on the government for Nigeria’s economic revival. But the question on their lips is the trust deficit that the government may not implement the prayers from the Workshop? Themed “ Leveraging the Financial Markets to achieve Double Digit Economic Growth for Nigeria”, a cursory look at the operating environment in Nigeria presents an atmosphere of many fault lines; rent seekers have taken over the entire economy, forex market, growth is abysmally sluggish and our external reserve is under threat, purchasing power is thinning out as disposable income shrinks daily, unemployment has become a nightmare, foreign investors’ apathy to Nigeria’s business environment, including insecurity real and private equity experts are reluctant to risk their investible funds.

The embattled Naira value is expected to further weaken with the ban of Bureau de Change operators from sale of forex by the Central Bank of Nigeria. It is already taking tolls except the apex bank increases supply chain to the banks. This write-up is not about the regulatory lax that led to the ban on Bureau De Change operators but Nigerians should be prepared for a higher level of economic crisis. It is disturbing that our forex market has been taken over by rent -seeking participants and the occasional rise of our external reserve is not comforting.

The inclement operating environment is a major impediment to viability of the financial market. The choice of Securities Dealers’ Theme for the Workshop is apt. They know that Nigeria’s financial market does not enjoy policy measures to enable it perform its role of efficient allocation of resources. The stock market no longer serves as a barometer for gauging the mood of Nigeria’s economy. Uncertainty drives the market. On the lips of the securities dealers is how to deploy the Workshop to identify policy measures that will revive the financial market to play its primary roles in the growth and development of the Nigerian’s economy. Issues that will engage the facilitators include: “Strengthening the Financial Markets to Accelerate Domestic Products and Employment in Nigeria.” and “ Harnessing Africa’s Vast Human and Economic Potentials: A case study of Nigeria.”

It is worthy of note that despite the unfriendly operating environment, market regulators and operators are innovating theirs businesses for global competitiveness. The NGX has demutualised and recently announced its readiness to commence derivative trading. The CIS recently globalized its certification processes and the Institute is engaging other professional bodies to key into its plan to metamorphose into Chartered Institute of Securities Dealers. The Association of Securities Dealing Houses of Nigeria (ASHON) is rebranding as every member-house is fully digitalized.

The other securities markets: NASD Plc, FMDQ, Nigeria Commodities Exchange (NCX), Lagos Commodities and Futures Exchange (LCFE) and other commodities exchanges have provided additional platforms for Securities Dealers to serve their numerous customers. But the extent to which everyone will be on top of the game is the existence of a strong economy. This is where government should demonstrate its support for the development of the financial market.

On the lips of Securities Dealers is the hypothesis of one pronouncement. By one pronouncement, the Federal Government controversially banned Twitter. The same government made one pronouncement to ban issuance of licences to Bureau de Change operators. One can therefore conjecture that one positive pronouncement can unlock the economy and change the face of the financial market for better. This is one of the major keys to the success of a plethora of government’s policies, formulated to take Nigerians out of poverty and promote ideals of shared prosperity. I believe this is the substance and essence of the Abuja Workshop.
Concluded.
Oni, communications consultant, Chartered Stockbroker and Commodities Broker, is the Chief Executive Officer, Sofunix Investment and Communications.