Who’s afraid of Emomotimi Agama?

I have always known him by reputation. Our paths never crossed until November last year, when I was invited by the Head, External Relations of Securities and Exchange Commission (SEC), Mohammed Bagudu, to serve as an observer, during a two-day training for the Capital Market Editors in Lagos. I knew that the invitation was a coded way of requesting me to intervene during the brainstorming sessions. I honoured the invitation as an opportunity to interact with the current Editors to share some experiences, having reported the market during the Call-Over Trading System up till early 90s. 

When I was introduced, Dr Agama welcomed me warmly, as if we had known each other for a long time. This is understandable as he was at SEC when I was at The Nigerian Stock Exchange (now NGX).  There is no doubt that the immediate past Managing Director of Nigerian Capital Market Institute (NCMI), a subsidiary of SEC, is a consummate teacher. He was on top of the subject matter and each time I intervened, he highlighted my points and urged the participants to take my contributions seriously. 

Given the substance and essence of the training, I wrote a piece entitled: “Anatomy of the SEC’s Capacity Building for Financial Press.” It was published by many print and Online Newspapers. Agama was very happy with the publication and he expressed this through a text message to me. 

He hit the headlines in April this year, when he was announced the Director General of the Commission, succeeding the unassuming Dr Lamido Yuguda, I sent him a congratulatory text message. His exponential rise from Deputy Director to Director General can be regarded as a touch of fate. But nobody can question Agama’s credentials. 

He has built for himself a solid wealth of experience at the Commission in addition to his pedigree as a Chartered Management Accountant, Chartered Stockbroker, Investment Banker and Economist. He seats atop a Team of seasoned stockbrokers. The new SEC Board also comprises some seasoned stockbrokers. But this comes at a cost. Public expectation is high as if they have silver bullet to attack the myriad of challenges plaguing the Nigerian capital market, a derivative of the economy.  

To be the High Priest of SEC is a no mean feat. It is indeed a hot seat. Until a clearcut autonomy is made, SEC Director General will always be at the mercy of the Central Bank of Nigeria (CBN), Ministry of Finance and occasional muscle- flexing by the National Assembly members, who regard the Commission as a cash cow that must declare profit annually and possibly pay dividend.

In early September, 2021, the National Assembly, put SEC under pressure on the issue of profitability, when the lawmakers announced that the Commission posted a deficit of N9 billion in three years. But in a swift reaction, SEC stated that it had remitted N1.5 billion into the federation account. As a form of transferred aggression SEC unwittingly raised dust by increasing annual registration fees of the dealing member firms. 

But it was later resolved for, a credit to the former administration. That period, I wrote a piece, entitled: “SEC and the Burden of Regulation”, where I argued that the in the United States of America, United Kingdom, China and Japan amongst others, SEC performs similar roles like that of Nigeria- promotion of market environment that is worthy of public trust. But unlike Nigeria, they do not remit funds to the government. 

One of the immediate tasks before the Commission’ new Board, is to enlighten the National Assembly that SEC is not-for-profit and the Commission should be supported by the government through grants as done in some jurisdictions to supplement the cost of monitoring the market for enhanced investor protection.

Agama and his team have started well as applications are said to be treated expeditiously. But let nobody envy the Team.  The Team has a mountain of Key Performance Indicators (Kpis), including confidence building of the internal staff. A new administration may embark on staff audit, which is usually a double-edged sword. Appropriate communication model has to be deployed because internal staff constitute a group of critical stakeholders in implementing an organisational vision and advancing brand its  recognition. 

The on-going  bank recapitalisation is the first major assignment of Agama and his Team. It will also be a litmus test of investor confidence in the Nigerian bourse. There are growing concerns that a few fat cats among the issuing houses are crowding out other dealing-member houses through abuse of vending agreement and setting up of dedicated porter to maximise profit and gain undue marketing advantage under the recapitalisation scheme. The Commission should peep into this before it metamorphose into oligopoly market.   

The Central Bank Governor, Olayemi Cardoso, is losing weight over the apex bank’s struggle to fight the scourge of inflation. But the Bank’s model has made investment in the money market instruments more attractive than other asset classes and thus undermining investment in the capital market.  Many investors have yet to recover from the huge capital loss they suffered in the comatose primary market where some issuers deceived investors and raked money without sanction from the regulator. 

The legacy issue of unclaimed dividend is haunting the market despite the Commission’s use of information technology for seamless processes.  More sophisticated products are emerging and smart promoters are desperate to bypass SEC and swindle unsuspecting investors. The Commission must be on top of the game. It should put the development of commodities ecosystem on its prayers to the government to grow the Gross Domestic Product (GDP). Activities of corporate raiders and crises of sudden changes in majority shareholding in the quoted companies are concerns in the market. 

The apex regulatory body  today supervises over five securities exchanges apart from other operators. Every new administration comes with its vision. The new Team may wish to update the Capital Market Masterplan in view of the rapid changes in the global capital market. But no vision can succeed without stakeholders’ engagement. Who’s afraid of Agama? Agama and his colleagues need constant support of market operators to navigate the inclement operating environment.  

They must consult. They should take advantage of many talents in the market. SEC has a lot to put in place to build a strong brand voice and upscale investor confidence. The strength of the new Team should be drawn from the immutable words of Abraham Lincoln that “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.” Best wishes to the new Team. 
Oni, an Integrated Communications Strategist, Chartered Stockbroker and Commodity Broker, is the Chief  Executive Officer , Sofunix Investment and Communications.