From Laurence Ani in Dar es Salaam, Tanzania, 05.07.2010
Managing Director of United Bank for Africa (UBA Plc) Mr Tony Elumelu, has stressed the need to diversify the stock profile of the Nigeria Sock Exchange as a way of reviving investors’ confidence and bolstering the country’s economy.
Elumelu spoke at the World Economic Forum (WEF) on Africa, in Dar es Salaam, Tanzania, where he was listed as a discussant in a session that also featured the Director-General of the exchange, Dr.Ndi Okereke-Onyiuke.“I think there are a couple of things we need to do to achieve that,” he said in response to the question of how the Nigerian capital market can regain its verve.
“One of these is to ensure a higher level of transparency. Of course we do have transparency, what we need is a higher level of that. We need to commend the effort of CSCS, but we can do a lot more. We need to ensure that the stock brokers are better regulated like the banking industry. I think we need to also encourage the liquidity of stocks in the market.“Most importantly, we have a dearth of stocks in the market. There are companies that government should deliberately encourage to be listed. Look at the telecommunications companies in the country; even if it’s two and a half or five per cent of MTN, Glo or Zain that is put on the market, it will enhance its capacity. The same applies to the oil companies. There are some countries that insist you can’t own more than 40 per cent, but here it’s a free market. There is no problem with that, but we’re just saying let us encourage these businesses to come to the market. It will help.
“When you have stocks spread across sectors like banking, telecommunications, technology and oil and gas, the market would be diversified and can thus attract more people. The federal government should also look at some government enterprises because it will also engender transparency in those enterprises. A percentage of NNPC, NPA and some other state-owned corporations should be put on the stock exchange,” he said.Elumelu does not however think it should be accomplished through a state policy. “It should be through encouragement. I believe if Nigerian Communications Commission should call its operators and inform them of the need to deepen the Nigerian capital market and say, for instance, ‘we want you to participate and this is how we expect you to participate,’ they would conform.”
Also at the Forum now in its twentieth year, Zimbabwean Prime Minister Mr Morgan Tsvangirai, has described the death of Nigeria’s President Umaru Yar’Adua as a great loss. “The passing of Yar’Adua is a great loss not only to Nigeria but to the African continent as a whole,” he said during a press conference organized to highlight Zimbabwe’s growth prospects.Asked if he thought Yar’Adua’s death may have any adverse effect on the country, Tsvangirai said: “When a president who is elected dies in office, there is a possibility it could undermine confidence in that government because he was the one that had been elected.”
This year’s World Economic Forum on Africa which opened Wednesday and rounds off Friday dwelt on the theme “Rethinking Africa’s Growth Strategy”. The Forum drew nearly 1,000 participants from across 85 countries, among them 11 heads of state.