Guardian

That the nation’s economy is ailing is saying the obvious. But the believers in the Nigeria project are now in greater consultations to find the needed tonic to reverse the trend. CIS is one of them.  CHIJIOKE NELSON captures their prescriptions.

THE truth is that telecommunications in the country is not as it used to be 10 years ago. But that is not to say that we can compare ourselves with some countries in the sub-region. Power is being touted to have improved, while some areas are without poles and cables and some are with cables but without power distribution. The same could also be said of some areas with power generation, but less than “half current,” although these may count as improvements in our economic indices. But are they really so?

Recently, the government offered some stockbrokers, who may be considered as having gambled with borrowed funds, a forbearance package. Who actually was the real loser? Simple economics said it is the taxpayer, whose efforts to be patriotic by paying their dues to the nation, were used in settling the “grave error” in the system. But could this be a lesson for others in the system? Only time will tell.

Nigerian leaders have consistently complained of paucity of fund as bane to the development of the nation’s economy, yet within the polity, there is bickering, claims and counter-claims over the actual percentage of the nation’s fiscal plan being executed yearly. The question again is: Will the borrowed fund be effectively utilised?

For the first time since it was created some 22 years ago, the Chartered Institute of Stockbroker (CIS), broke loose from its cocoons to take its rightful position in the national polity.

Hitherto, the institute, whose primary role is to regulate the conduct and practices of the stockbroking profession in Nigeria, had played a behind-the-scene role in recommending virile economic policies to the executive arm of government. Unfortunately though, its significance in helping to develop workable economic policies for the development of the Nigerian economy has attracted little or no recognition for this body of professionals that drives the over N6 trillion capital market in Nigeria.

The new crop of executives of the CIS led by Ariyo Olushekun, who is also a long serving member of the council of the Nigerian Stock Exchange (NSE), resolved to take the bull by the horns when it organised its first ever National Workshop with the theme: “Working the Transformation Agenda- The Real Issues” on Tuesday, November 11, 2012, at the prestigious Transcorp Hilton Hotel in the capital city of Nigeria, Abuja.

The event, which attracted top financial industry practitioners and regulators of the capital market and relevant government agencies and parastatals like the Bureau of Public Enterprises (BPE), Debt Management Office (DMO), the Federal Ministry of Power and a key player in the telecommunications sector like MTN, put in the front burner, two major issues that are very dear to the heart of Nigerians- power and telecommunications.

Though the telecommunications sector is seen to have taken-off the ground in Nigeria, the stockbrokers believe it has not yet fulfilled the much desired purpose of being a catalyst for democratising wealth creation for the people of Nigeria, especially investors in the capital market, as not a single one of the four telecommunications giants operating in the country has deemed it fit in the last 10 years or less to list their shares on the floor of NSE.

On the issue of power reform being championed by President Goodluck Jonathan and his administration, “where is the power?” was a million dollar question raised by the CIS, with roadmap and status update painstakingly addressed by Atedo Peterside, Chairman, National Committee, National Council on Privatisation (NCP), being a speaker of the session.

Peterside, who doubles as Chairman of Cadbury Nigeria Plc and Stanbic IBTC Plc, clearly noted that the power sector reform has recorded an appreciable progress in the last 15 months, noting that the successful implementation of the agenda will result in a dramatic boom for the economy.

Atedo was quick to breakdown the road map for power in Nigeria into seven stages, which have all almost been achieved.

According to Peterside, some early milestones that have been achieved since 2005 till date included the passage of the Electric Power Sector Reform Act by the National Assembly in March 2005. The Act, he noted, outlined the framework of the reform, which among others, included unbundling the state-owned power entity- National Electric Power Authority (NEPA) into generation, transmission and distribution segments; provision for the transfer of assets, liabilities and staff of NEPA to Power Holding Company of Nigeria (PHCN) and then to successor generation, transmission, and distribution companies.

Part of the early milestones achieved also include the creation of a competitive market for electricity services in Nigeria, as well as setting up of an independent regulator- Nigerian Electricity Regulatory Commission (NERC).

The chairman of the technical committee on power also noted with satisfaction the incorporation of 18 new successor companies comprising of six generation companies (gencos), one transmission company and 11 distribution companies (Discos) in November 2005, as well as  the transfer of the assets, liabilities and staff of PHCN to successor companies, thereby granting the latter greater operational autonomy on July 1, 2006.

In 2011, the bulk trader of generated electricity was established to negotiate and enter into Power Purchase Agreements (PPAs) with privatised generating companies. Perhaps, the most recent mileage achieved by government in actualising the dream of making power available to every Nigerian was entering into vesting contracts with distribution companies.

Peterside, in his update to stockbrokers at the maiden yearly workshop of the CIS, said government is committed to driving the process of making available power, noting that the NCP on October 29, 2012, approved the five preferred bidders for Gencos and 10 preferred bidders for Discos- two transactions that are expected to yield about $2.5 billion for government.

He revealed that eligible pre-qualified bidders have been invited to express an interest in Afam genco and Kaduna disco on or before January 31 2013.

Though Peterside acknowledged that the process of privatisation of the power sector has not been without its challenges, he assured the workshop that the process has reached an advanced stage, given the selection of preferred bidders, a transaction which is likely to be closed by mid 2013. He further disclosed that the sale of Kaduna disco and Afam genco will conclude later. But to continue the timeline, the chairman of the technical committee on privatisation of power said it must continue to work very closely with all critical stakeholders in the economy.

Meanwhile, the Director-General of the Securities and Exchange Commission (SEC), Arunma Oteh, in her opening remark at the workshop, said the capital market was critical to the growth of the Nigerian economy.

Succinctly, she said: “The easiest way for outsiders to see Nigeria is through the capital market,” adding that the market is very needful to support government in sourcing cheap funds for economic growth as yearly budgetary allocations, especially as it concerns capital projects, would never be enough to deliver the dividends of democracy to the people.

She however, argued that the recent forbearance gesture for the capital market by government was a step in the right direction as it was necessary to refuel the economy.

Oteh informed the stockbrokers and the entire capital market community that as relentless efforts were being made to further deepen the market by getting highly capitalised companies in both the power and telecommunications industries to list their shares on the NSE, additional flow of wealth was expected to be injected into the market through other sources like the Sovereign Wealth Fund, Collective Investment Scheme, among other sources.

Her words: “The consultative approach we have taken to call large companies to the capital market will soon begin to yield fruit.”

Oteh predicted that 2013 will be a better year for the capital market, but was quick to caution that making the prediction a reality will depend very much on operators in the capital market, especially the stockbrokers.

Is the CIS national workshop a one –off event?  The Chairman, CIS Annual National Workshop Committee and Group Managing Director of BGL Plc, Herbert Okumagba, while expressing gratitude to all who attended the maiden event, said it was only the beginning, assuring that the CIS has much more up its sleeves to offer the economy through its national workshop in the years ahead.

Mr. Olushekun also added that “the workshop is going to be a yearly event. It is going to initiate national discourse on economic issues. It is going to advance discourse on existing issues. It is also going to monitor economic policies, as well as budget implementations.”