Guardian

AS a strategic regulatory institution, the current impasse over the budgetary allocation to Securities and Exchange Commission (SEC) has elicited concerns among stakeholders, who argued that personality issue should be divorced from germane economic fundamentals.

The National Assembly has snubbed consideration of SEC’s budget proposals, over its disagreement with its director-general, Ms. Aruma Oteh.

The development has led to zero allocation profile to the commission.

But the Lagos State Chamber of Commerce (LCCI), argued that the current stance of the National Assembly has a number of unintended consequences, some which include perception and reputational risk for the stability and credibility of the Nigerian capital market and adverse impact on regulatory effectiveness in the capital market.

According to the chamber, the development could roll back the recent gains of recovery and stability in the capital market and send wrong signals about the nation’s democratic process, especially the preservation of the tenets and values of separation of powers.

It therefore urged the lawmakers to review its position in the interest of the stability of the capital market, the nation’s financial system and the larger economy.

“We urge the National Assembly (in this particular instance) to look beyond the person of the Director-General of SEC, and give consideration to the wider implications of its decision for the economy.

“We believe there are adequate provisions in our laws and a multitude of state institutions that could be deployed to bring any erring public official to justice.  This is a better option to explore rather than a clampdown on a strategic regulatory institution”, the chamber stated in a statement signed by its director–general, Muda Yusuf.

The Managing Director/Chief Executive Officer of CRC Credit Bureau Limited, Tunde Popoola believes that the decision of the National Assembly is not in the interest of the larger society.

His words: “It looks like the case of when two elephants fight, the grass suffers for it. The collision on the removal or otherwise of the SEC DG between the executive and the legislature will lead to undermining investments opportunities and halt activities in the capital market making those who have nothing to do with the issue to be the loser.

“I do not understand the rationale for the legislators insisting their resolutions must be implemented by the executive. The resolution is not a law; it is advisory to the best of my knowledge. I think the legislature should have looked for other means of getting their resolutions implemented than resorting to denying access to funds to a whole government department simply because their call for the removal of the head of the commission was not heeded by the executive. It points to the potential to humiliate the president. I believe discussion on this was not exhausted.

“It means that they will not be able to spend, thereby denying them the opportunity to carry out any major projects or programmes. If it persists, it may ground the major operations and activities of the commission, including the capacity to pay staff emoluments and hinder their ability to perform their core function of oversight on the capital markets.

“It may precipitate crisis and staff may go on strike with the attendant implications. Of course, the capital market will suffer for it and ultimately the economy and Nigerians. I believe that now that the board of SEC has been constituted, it may assist in resolving the issues”.

Also speaking on the issue, a legal practitioner and public commentator, Eze Onyekpere, invoked the provisions of section 81 (1) of the Constitution of the Federal Republic of Nigeria 1999: “The President shall cause to be prepared and laid before each House of the National Assembly at any time in each financial year estimates of the revenues and expenditure of the Federation for the next following financial year”.

What is therefore laid before the National Assembly (NASS) is an estimate awaiting their approval, he explained.

However, he said, the step taken by NASS in refusing to appropriate funds for the activities of SEC in the fiscal year 2013 is unprecedented, saying that it has its background in the work of the committee set up by the House of Representatives to probe SEC and the capital market leading to recommendations via a motion by the House of Representatives to the President to sack the DG of SEC.

Ideally, he said, the President should implement well thought- out resolutions of NASS, but the President did not agree with the position of the House and has allowed the DG SEC to continue in office. To force the hand of the President, the House invited the Senate, which joined the fray, in this refusal to approve expenditure for SEC in 2013.

According to him, the literal approach to this will mean that an institution with the power of approval also has the power to hold back approval but the implication of this is far reaching.

“It means that even staff salaries cannot be paid and all other lawful expenditures cannot be made until Oteh is sacked. Thus, other parties that are not involved in what has apparently become a street brawl will bear untoward consequences simply because they are in one way or the other associated with SEC.

“This scenario portends danger and may lead to a relapse of the capital market crisis. Generally, it is not in the overall interest of the nation”, he said.

He added: “This approach to budget legislation appears ad-hominem and is of doubtful legal validity because laws are supposed to be made to be of general application and not specifically targeted at one individual. If the parties stick to their guns, this amounts to abolishing SEC without repealing the Act setting it up. Infusing greater reasoning into the process would mean that NASS and the President ought to have found a way to resolve their misunderstanding without necessarily grinding SEC to a halt.

“The way forward is that the President and NASS, in the spirit of the season, should engage in negotiations that should lead to the approval of a budget for SEC and the eventual exit of the SEC DG. Otherwise the courts are available to test the legality and constitutionality of this legislative step.

“Going forward, this is an opportunity for NASS to lay down by legislation, broad parametres that would lead to public officers being shown the door, instead of waiting to do it by piece meal legislation’’, he said.