Nigerian Stock Exchange

By Onwuka Nzeshi

The House of Representatives Committee on Capital Market Monday demanded the listing of key players in the telecommunications and petroleum sectors of the economy on the Nigeria Stock Exchange (NSE).

It also hinted that a Bill would soon be presented to the National Assembly to compel organisations such as MTN Nigeria, Airtel, Glo, Etisalat and the major oil multinationals operating in the country to participate in growing the economy as publicly quoted companies.

Chairman of the Capital Market Committee, Hon Herman Hembe, who made the proposal at the National Assembly, said the listing of “these” key players in the economy would engender growth of the capital market, lead to the diversification of the market and boost the capacity of the stock exchange to stimulate further growth of the economy.

Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, recently made a similar proposal at the Nigeria Economic Summit.

The committee chairman, Hembe said he was interested in getting the telecoms operators listed on the NSE because they had been making huge profits from their operations in Nigeria and repatriating same to their home countries where they are duly listed on the stock markets.

He argued that given the benefits of such organisations in a capital market, it would make an economic sense for these companies to participate in the NSE.  

“These telecommunications companies make huge profits from Nigeria and are mostly not listed on our stock market. MTN for instance got a licence in 2001 for the sum of $285 million   mostly financed by Nigerian banks. Between January and June of the same year, MTN repatriated some $5 billion as profits from their Nigerian operations. It is not in doubt that the MTN Nigeria, which is listed on the Johannesburg Stock Exchange under the industrial-non-Clinical services-Telecom-munications sector, is the largest contributor to the MTN Group. The Nigerian operations account for 25 per cent of the revenue of the MTN Group.

This story is not much different with the other telecommunications operators in Nigeria.

“It is incumbent on us to pass legislative reforms that would encourage designated sectors to list on the Nigeria Stock Exchange. This will be through formal and contractual requirements do so, supported by incentive, unbundling of stringent eligibility requirements that create high barriers for potential entrants and hinder participation by willing businesses and adaptation of options that promote foreign investments in our economy under terms that support our national interests,” he said. 

Apart from getting the telecommunications companies listed, Hembe said, the committee would also ensure that the oil multinationals such as Shell Petroleum Development Company of Nigeria (SPDC), Chevron Texaco, Total, Nigeria Agip Oil Company (NAOC) as well as the Nigeria National Petroleum Corporation (NNPC) were listed.

According to him, the power and energy sector would be brought into the stock market as soon as the sector was fully deregulated and the monopoly of the Power Holding Company of Nigeria (PHCN) broken.

“This committee will partner relevant stakeholders to speed up the passage of the Petroleum Industry Bill (PIB) to foster subsequent listing of major players in the upstream petroleum sector, the NNPC and all other operators in the oil and gas sector. This will imply part-ownership of these companies by Nigerians and subsequently diminish the secrecy and massive fraud that is associated with the oil and gas sector in Nigeria,” he said.

Hembe explained that the proposed   measures were not to witch-hunt any corporate organisation or scare away foreign investors, but a necessary policy instrument that would rapidly grow the economy by ensuring that a substantial amount of the wealth that is generated in Nigeria stayed in Nigeria.