Oando: SEC’s Action Can Mar Nigeria’s Image, Says USNC

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Solomon Elusoji

The US – Nigeria Council for Food Security, Trade & Investment has said the action of the Securities & Exchange Commission (SEC) against Oando Plc can negativel affect the image of Nigeria globally.

The council, a body that promotes opportunities in Nigeria to US investors and advances commercial partnerships, has also urged the SEC “to sheath its sword in its current feud against Oando Plc.”

It made the appeal in a statement THISDAY obtained yesterday, tasking the federal government to ensure that the treatment of Oando “does not serve as a deterrent to the international investing community.”

It pointed out that Oando Plc, as a founding member of the Council and as an active and valued participant in the Council’s activities, played an important role in promoting business and direct investment in Nigeria.
Consequently, the statement said, “We should be portraying to the rest of the world, positivity and potential at time where foreign direct investment is highly necessary to keep the nation afloat.

“The market is disturbed, investors are concerned that there is a capital market regulator that seems to lack a corporate governance structure and seems to apply compliance, fairness and equality as they like, on their own personal discretion as opposed to approved, tried and tested processes and procedures.

“These calculated behavior from the SEC has long term ramifications, which will affect the country’s image, and increase the perception of a country and people that have a lack of respect for the rule of law,” the statement said.
The council, however, said it remained committed “to strengthening the commercial relations between the United States and Nigeria. It recognises the importance that strong capital markets play in attracting foreign investment, creating new jobs and stimulating economic growth.”

“This underlines the fact that if a regulatory body for the capital market is perceived to be stifling the market, it will have a detrimental effect on the ease of doing business, business growth and sustenance, deter new business and international investment, all of which will eventually translate to economic decline.”

The council, therefore, challenged the regulatory body “to discharge its duties with due process and fair equitable treatment for all parties. The role of the USNC cannot be over emphasised.”
The USNC Chairman, Amb. Terence McCulley had in a statement said the council “stands ready to play its role in the most important and dynamic economy on the African continent.

“As a convener, clearing house and catalyst for investment into Nigeria, the USNC will continue to promote expanded commercial ties between the United States and Nigeria”.
The Institute of Directors (IoD) had agreed to retain a watching brief on regulatory development, especially on the SEC/Oando case with a view to coming out with learning guidelines around the case study when the dust finally settles.

The Founder of Proshare Nigeria Limited, Mr. Olufemi Awoyemi had said the SEC/Oando case unfortunately is further exacerbated by the lack of, absence and the perception that those empowered to exercise such oversights themselves have serious issues of corporate governance to contend with. So, where do we begin to reset our sovereign corporate governance issues?”

According to United Nations Conference on Trade and Development (UNCTAD), Nigeria – ‘Africa’s giant’ who currently sits on billions of proven oil reserves and a couple more billions worth of investment opportunities in the oil and gas sector – presents an astonishing decline in FDI of 36 percent in 2018 with FDI inflow into Nigeria declining from a high of $8.9 billion in 2011 to a derisory $2.2 billion in 2018.

This is hardly surprising as Forbes further highlights in a report written in May 2019 that “The equity investment in Nigerian between 2013 and 2018 has fallen from around $2.9 billion in 2013 to $139 million in 2018.”

As if this wasn’t bad enough, the Exchange Traded Fund (ETF) has dropped a whopping 74.5 percent in the last five years. To add fuel to fire, Nigeria’s highly praised, but ridiculously low ranking in the Africa Competitiveness Report by the World Economic Forum of 134th out of 144 countries is something we should no longer brag about.

With these abysmal figures, one must challenge regulators like the SEC and its contemporaries on their important role in reversing such averse figures. Essentially, getting the market back on its feet is vital.