The refusal of the National Assembly to approve the budget of the Securities and Exchange Commission has generated heat in the last few months. UDEME EKWERE examines the impasse, which is affecting capital market operations.
The ongoing face-off between the National Assembly and the management of the Securities and Exchange Commission has continued to be a source of concern to stakeholders in the capital market.
According to them, it is unjust for the SEC budget not to be approved by the legislators even after the first quarter of the year has come to an end.
The problem has brought to the fore the popular saying that when two elephants fight, it is the grass that suffers.
While some believe that the House of Representatives is punishing a whole institution unjustly because of the members’ “personal” issues with the head of the commission, others are of the opinion that for the sake of the sector, SEC should be flexible in its positions and dealings with the lawmakers.
The House of Representatives had refused to allocate any money to SEC in the 2013 budget as a result of the face-off that ensued between the lawmakers and the Director-General of the commission, Ms. Arunma Oteh, last year when the House Committee on the Capital Market investigated the activities of SEC.
The DG had accused the committee of being unnecessarily harsh on her because she refused to release money for the conduct of the probe and bribe some of the members.
The committee subsequently found her guilty of serious infractions and recommended her sacking, a position that was endorsed by the whole House, which passed the recommendation to the Executive.
However, President Goodluck Jonathan’s refusal to fire Oteh made the lawmakers to not appropriate any money for SEC in the 2013 budget.
Sources at the commission told our correspondent that the zero budget allocation was drawing SEC back in terms of some of the discharge of some of the functions and activities it was meant to have embarked upon since the beginning of the year.
One of the sources, who declined to have her name in print because she was not permitted to speak on the issue, said some of the reform projects and road shows, which the commission was to undertake, had been left unattended to due to the zero budget allocation.
She said, “Presently, a lot of activities aimed at improving the capital market, which SEC should have undertaken, have yet to commence because of the zero allocation.
“You know that SEC has a lot of oversight functions to play as the apex regulator of the capital market, and every year end, we come up with programmes and make plans on things to do the next year aimed at building up and improving the market in the New Year.
“But since this year began, we have not been able to kick off some of those projects, which include investor education and enlightenment programmes, road shows and reform programmes because of the zero allocation.”
The Managing Director, Compass Securities Limited, Mr. Emeka Madubuike, said if not properly handled, the impasse could erode investor confidence in the capital market.
He said, “Of course, we do not need anyone to tell us that issues like this can affect the running of the market negatively. We at ASHON believe that this issue should be resolved quickly so that our market will not suffer losses like we experienced in the past.
“If SEC as an institution is not performing its functions of market development and regulation well, it will begin to affect our market at a point, and we do not want this to be the case because everyone has worked hard to bring the market to the point where it is now.
“What we will expect is that the institution should be separated from the individual. I think a major problem, which we have in this country, is that we tend to build individuals and not institutions. But the reverse should be the case.”
Madubuike, who is also the President, Association of Stockbroking Houses of Nigeria, added that it was important for the President to step in and address the issue properly so that investors and the investing public would be better for it.
The President, Renaissance Shareholders’ Association of Nigeria, Mr. Olufemi Timothy, said the decision by the House of Representatives not to approve the commission’s budget was unfortunate, not only for the capital market, but for the economy as a whole.
He explained that a major error on the part of the legislators was that they did not separate national interest from personal interest.
Timothy added that if the lawmakers had any personal issue with Oteh, they should not allow it to affect the whole commission.
He said, “Our legislators should not deny SEC of its annual budget, they should think of the national interest of the stakeholders because a lot of people are bound to suffer with this decision – investors, shareholders and even the market as a whole.
“This is because SEC cannot carry out its regulatory and oversight functions if it does not have adequate funding, and this will surely affect its ability to regulate the market as it should.”
Some commentators on social media said the National Assembly had a role to play. For instance, a respondent who gave his name as Paul Nelson, said, “The National Assembly has its oversight functions to carry out, and if the members feel that the woman was not qualified in the first place to be there, then the President is duty bound to remove her, bribery allegations or not.
“Or does it mean because of one woman, a whole institution will collapse? How does that work?”
Another commentator, who gave his name as Adebowale Ogunmuyiwa, said the stance of SEC on the issue should be a bit more flexible.
According to him, if it will take the resignation of the principal officer of the commission to allow peace to reign, then it is a small sacrifice for the general good of the market.
He said, “SEC may lose the ability to meet its obligations because of a single officer. Should we build SEC around persons or around a system that can function effectively and efficiently with or without any particular person?
“If the exit of one person will save SEC from collapse, then take the negative publicity off SEC and represent SEC in better view to stakeholders and the legislative arm of government. I think the person should resign for peace and a better SEC. There are other qualified and competent people that can manage SEC.”