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‘Government should ensure that border closure is not another lost chance’

By Maria Diamond
16 November 2019   |   3:13 am
Tayo Orekoya is a professional accountant. He qualified as a chartered accountant in 1989 and became a fellow of the Institute of Chartered Accountants of Nigeria (ICAN) in 2003.

Tayo Orekoya

Tayo Orekoya is a professional accountant. He qualified as a chartered accountant in 1989 and became a fellow of the Institute of Chartered Accountants of Nigeria (ICAN) in 2003. He started his career as a banker within the duration of 10 years as pioneer management of the then Eko International Bank, now part of Polaris bank. He was the most senior staff that was asked to open the first branch of the bank called Ikeja Plaza bank at the time.

On January 3, 1992, he resigned and started his first company called Trust Worth Financial Investment Limited. Afterward, he proceeded to host a TV show called ‘Banking and You’ on NTA Channel 10, then moved to NTA Channel 5 and later MITV. Orekoya, however, proceeded to a second TV show called ‘Stock Market This Week’ and that gave birth to the initiative of Pearl Awards.

As an accountant, he discovered the gap that quoted companies were not being recognised for actual performance and he saw the need to reward corporate excellence by utilising empirical data. In this interview with Maria Diamond, Orekoya talks about the need for government to keep the lid on Nigeria’s border, the capital market and the forthcoming Pearl Awards.

What’s your take on the closure of Nigeria’s border?
The border closure is an excellent development. Yes, there would definitely be initial pains, without pains there would be no gains. This is the time for Nigerians and the government to focus on self-sufficiency. A number of gains are being made currently in terms of revenue, security, others. You will notice that since the border closure we’ve had less reporting of kidnappings. This goes to say that foreigners perpetrate a greater deal of these criminal and inhumane acts. Also, our neighbouring countries are actually crying more than the bereaved. Ghana is under pressure, the Benin Republic is cap in hands begging, and what that says is that these neighbouring countries have actually been feeding fat on Nigeria. So the pains will be there, but the government also needs to put in place clearly defined initiatives that would ensure the border closure is not another lost chance.

What do you think the government needs to focus on to achieve self-sufficiency?
The government should implement sustainable policies and initiatives? How do we now ensure that we are able to optimise the gains that we have now as a result of the border closure and how do we translate it into self-sufficiency. We talk about China closing its border for about 40-years but what did they do? China put in place workable policies, training, and initiatives to ensure that people are able to be self-sufficient and today they are thriving.

Tell us about the ideology behind Pearl Awards, what do you aim to achieve?
The Pearl awards seek to reward corporate excellence in the Nigerian capital market, but as a background to that, it has to do with promoting the interest of investors and prospective investors in the Nigerian capital market. At the time the awards started 24 years ago in 1995, not so much was known about the capital market, we realised there was a gap, quoted companies were not being recognised based on actual performance using empirical data and we decided to fill this gap. So the award focuses on developing the growth of the capital market in the interest of investors and prospective investors.

What was the criterion behind the selection of nominees?
One of the unique things about the pearl awards is that it is based on the actual performance of quoted companies. We have nine clearly defined indices in line with global best practices to reward corporate excellence and performance in the stock exchange. This includes turnover growth, earnings yield, return and equity, net asset ratio, profit margin ratio, dividend cover, dividend yield, dividend growth, and share price appreciation. So those are the nine indices for the main competitive category. We have what we call the post-listing requirement in the stock exchange.

For a company to be considered for these awards, the company must have complied for the post-listing requirement of the stock exchange but beyond that, for the sectoral leadership awards, we have a minimum of three companies that must have complied with these requirements and also filed their annual reports with the Nigeria stock exchange, and also been seen to practice good corporate governance. So, for each of the sectoral leadership awards, there are 17-categories. Those are the minimum conditions. You then look at the performance of these companies. We have the central open committee of the awards for this year, which analyses the performance of these companies using their annual financial reports as presented at the annual general meetings, and also the Nigerian stock exchange yearly reports and daily official lists. So we crunch all the figures using the defined parameters and we are able to have the first three for each of the 17 sectors. For the market excellence awards categories, all the equities listed in the stock exchange are accessed utilising each of those nine criterions.

How has Pearl Awards boosted the Nigeria capital market?
At the time the awards started, the capital market was seen as an elitist market. People had the erroneous impression that before you could invest in the stock exchange, you must have huge sums of money to put in the capital market. But we contributed to changing this narrative because one of our objectives is to engender public awareness about the capital market. So year in-year out, we ensure that we are able to bring to the knowledge of the people the fact that the capital market is for everybody. So we put in place the Pearl Awards annual public lecture where we engage with the stakeholders and shareholders. We have the regulators come in to discuss the market, and this also has engendered public consciousness about the capital market. Beyond that, for companies that have been nominated for the awards, over the years, we have seen a trajectory that shows that their share prices go on the upward trend after being nominated or winning the awards. Also, this has engendered healthy competitiveness amongst the companies that are quoted on the stock exchange both at the sectoral level and at the market excellence level.

Tell us about the credibility of the Pearl awards?
The issue of credibility had never been a challenge because, from the outset, we were determined not to be just any awards. So in terms of the constitution of the board of governors, we have first-class time-tested credible Nigerians who are professionals and the board of governors. We have a solid board that has proven to not only be credible and competent but highly dependable.

What are the challenges you’ve encountered over the past 24-years?
One major challenge particularly when we started was the issue of funding. For a new project of that nature, we had to get support from regulatory agencies, such as the corporate affairs commission, others. So it was tough, but we weathered the storm. But over the years, we’ve been able to change the narrative through creativity in funding the awards and we’ve had supports from various institutions.

Tell us about the awards categories for this year?
We are going to have three main categories of awards. The main competitive category, special recognitions awards category, and the honorary awards category. So for the main competitive awards category and the special recognition awards category, the nominees have been released on October 22.

How many awards are we looking at in total?
We’re looking at about 34 awards for this year. We have 17 sectoral leadership awards, nine-market excellence awards, four special recognition awards and then three honourary awards.

What motivates you?
I believe that success is a function of ensuring that you put smiles on the faces of the greatest number of people. For me, leadership is everything. Everything rises and falls on leadership, which was why we introduced what we call the Corporate Institutions Training Consult (CITC), a leadership centre, which is the company behind the Pearl Awards. I believe in people, and I believe in adding value to lives.