LEGISREPORTS EDITORIAL: Reps must rethink decision on SEC
LEGISREPORTS NG – As the 2013 fiscal year settles into second quarter, one sector of the Nigerian economy that has continued to trudge on with needless and/or avoidable legal leash is the stock market. Operations of this very vital sector of the economy have been hamstrung by the egoistic and questionable intervention of the National Assembly, especially the House of Representatives.
A tango between the House and the Director-General (DG) of the Securities and Exchange Commission, SEC, Ms Arunma Oteh has been taken to a worrisome extent by the lawmakers of the lower chambers who see no qualms in throwing the baby away with the bath water.
Only recently, the lawmakers wrote to remind President Goodluck Jonathan on their verdict on zero allocation for SEC as regards the 2013 budget. In the said letter, the House told the president that “all revenues including all fees received, fines, grants, budgetary provisions and all internally and externally generated revenue shall not be spent by the Securities and Exchange Commission for recurrent or capital purposes or for any other matters, nor liabilities thereon incurred except with prior appropriation and approval by the National Assembly.”
Put simply, SEC was not to get any funding for its operation this fiscal year, even though its regulatory activities are vital to the Nigerian economy. In specific clauses, the Commission was specifically singled out for zero allocation in the 2013 appropriation law passed by the national assembly. Not even a request by the president in his supplementary appropriation bill before the legislature that the clampdown on the SEC be reviewed because of the unpleasant consequences on the health of the economy has been heeded by the heady Representatives who tend to miss no chance to bash the president’s policies and actions even though majority of them are in same Peoples Democratic Party (PDP) with him.
Not a few stakeholders in business, economy and politics believe that the current stance of the lawmakers is way out of order. As the year progresses, the continual insistence of the lawmakers on its decision to starve SEC of funds has become a clear case of vendetta on account of its disagreement with Oteh.
The row between the capital markets regulatory body and the House began sometime last year. Following the near collapse of the capital market in the aftermath of the global economic recession, the House instituted a public hearing into the cause of the lull in the capital market. Unknown to members of the public, Herman Hembe, chairman of the House committee on the capital market (who was subsequently sacked from his post), begun an under-the-table transaction with the SEC DG, a deal which eventually got awry and eventually compromised the integrity of the hearing and its still-born outcome.
The story was that Hembe had demanded N40 million from SEC, ostensibly to defray the cost of conducting the hearing. While SEC agreed in principle to make the money available to the committee as a body, it was learnt that its disgraced chairman allegedly requested for an up-front payment in cash. Oteh reportedly turned down the request, a development which apparently infuriated the youthfully exuberant lawmaker to unleash a tirade against the qualification, competence and personality of the SEC boss at the open hearing before live television cameras. Not willing to be outdone, the badly hurt Oteh lashed back at Hembe, spilling the beans of the shady moves by the latter. An odious stench was left off the Pandora box and the rest like they say, is history.
Feeling badly battered as an institution, the House of Representatives which meted some punishment to its prodigal Hembe, took on the battle and eventually called for Oteh’s sack on the ground that she was not qualified for the job ab initio. The president declined the resolution from the green chamber and to show that it can bark and bite, the Representatives decided to cut off funding to SEC (sadly, not Oteh) in the 2013 budget. Surprisingly, the senate also joined the House in this vindictive move.
The point must be made that before her appointment as DG SEC, Oteh paraded a convincing resume including her last job post as Vice President, Corporate Development of the African Development Bank, AfDB, from where she was invited to come and serve her country. On the point of law, it may be argued that Oteh’s experience in capital market operations may have fallen short of the requirement for the position of the DG of SEC. According to the law, the holder of such experience must have extensive experience in the capital market, a requirement the lawmakers must have latched on to in insisting for her sack.
But the mere fact that the senate, constitutionally empowered to screen and clear her for the job did just so, renders the action of the lawmakers as a purely needless revisionist agenda as the House of Representatives cannot come to the conclusion that Oteh is unqualified for the job without indicting the Senate of incompetence in discharging its duties. Possibly aware of this, the senate reportedly indicated its readiness to revisit its ill-advised agreement with the House on the sack of Oteh.
As President Jonathan has not acceded to the wish of the House on the sack of Oteh, the SEC is operating on shoe string budget, a development which further endangers the reported rebound of the capital market under the ‘unqualified’ Oteh. LEGISREPORTS believes this ding-dong affair has gone far enough and it is high time the Representatives come down from their high horses. Yes, Oteh may have stirred the hornet’s nest and murdered sleep but the smooth operations and unhindered recovery of the capital market should be paramount to patriotic minds at the moment.
As we see it and indeed as majority of the stakeholders would agree, the capital market goes far beyond Oteh. The House must realize that their face off with Oteh casts them in the mould of a bully institution, blinded by the selfish need to settle egoistic score.
From all indicators, the Nigerian stock market is forecast to end 2013 positively and is expected to continue to recover the losses it suffered in 2008 and 2009 when the market had lost over half of its value. By the time the tango started in 2012, the Nigerian Burse reportedly recorded substantial recovery as it posted a growth of 37 per cent, while the All Share Index, ASI, closed positively at 35 per cent. That growth is expected to continue this year.
In the light of this development, the House should see its insistence on the sack of the SEC DG as more of distraction rather than an oversight in the running of the capital market.