The new SEC management should sustain the implementation of capital market master plan, CHRIS UGWU writes
Transactions on stocks and other securities are more complex and volatile than other markets especially after the global financial meltdown and how it reflected on the economic status of the world and local bourse that is still facing crisis of confidence.
With the massive sell-offs that have characterised the Nigerian equities market in recent times following volatility in the economy and the ravaging COVID-19, there are concerns among market watchers that transactions in equities might return to what was witnessed during the bleak periods of 2008 and 2009 if adequate measures are not taken urgently to salvage the market from the current limbo.
Following the persistent depression in the nation’s equity market, operators have agreed that for the market to regain its pride of place as a center of capital formation, the new Director General of Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, must redirect the market in a way that would bring back the lost glory.
Yuguda recently resumed office alongside the Executive Commissioners namely: Mr. Reginald Karawusa, Mr. Ibrahim Boyi and Mr. Dayo Obisan in Abuja after the Senate confirmed their appointments following request by the President Muhammadu Buhari.
However, market operators have applauded the immediate past DG, Ms. Mary Uduk, for recording an enviable and appreciable feat as regards implementation of Capital Market Master Plan and other innovations that have turned around the Commission.
A peep into Uduk’s achievement In the last two years, the Commission under Uduk implemented the Capital Market Master Plan initiatives alongside other key reforms and together it recorded a number of successes.
Who is Yuguda? Yuguda obtained a B.Sc. (Honours) degree in Accounting in 1983 from Ahmadu Bello University, Zaria and an M.Sc. in Money, Banking and Finance in 1991 from the University of Birmingham, United Kingdom.
He also holds a Certificate in Financial Asset Management and Engineering from the Swiss Finance Institute, Geneva, Switzerland and a Certificate in Investment Performance Management from the CFA Institute, Charlottesville, Virginia, USA.
He is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and a holder of the CFA charter. Yuguda has attended leadership training programmes at leading business schools including Harvard, INSEAD, IMD, Wharton, Haas, Kellogg, Chicago Booth and London.
The new Director-General brings to the Commission over three decades of experience as a central banker, economist and investment manager.
He began his career with Central Bank of Nigeria in 1984, and worked in several departments such as Foreign Operations, Banking Supervision and Reserve Management. He also served in the Debt Conversion Committee Secretariat where he managed the Nigerian Debt Conversion Programme together with the pioneer staff in the secretariat.
In 1997, he joined the staff of the International Monetary Fund (IMF) in Washington DC, USA, on secondment as an economist in the Africa Department. In this position, Mr. Yuguda assessed economic policies, offered policy advice and managed balance of payment support programmes in IMF member countries.
In 2001, Mr. Yuguda returned to the CBN to lead a team of staff to restructure and diversify the CBN’s growing foreign exchange reserve portfolio.
A new investment policy was adopted, new asset classes introduced, the CBN’s in-house fixed income trading and settlement capabilities were upgraded, while a reputable global custodian and securities lending agent as well as several international asset managers were selected.
The new SEC boss reached the pinnacle of his career at the CBN as Director of the Reserve Management Department from 2010 to 2016, where he inculcated a strong risk-aware investment culture and engendered a disciplined approach to investment evaluation. He retired voluntarily in 2016.
Yuguda has served as a nonexecutive director on the boards of Africa Finance Corporation (AFC) and Premium Pension Limited. He has been a member of the Board of Directors of the SEC since June 2019 and is married with children.
Operators’ expectations Professor of capital market, Uche Uwaleke, said the starting point for the newly appointed director general and his team is the assessment of the implementation of the capital market master plan to determine outstanding issues with a view to revising and updating the roadmap.
Thereafter, Uche said SEC management should ensure that the revised blueprint for capital market development is integrated into the federal government’s 2nd Economic Recovery and Growth Plan (2021- 2025).
This, according to him, is very vital because the current ERGP paid little or no attention directly to issues pertaining to the capital market. Uche, who is Head, Banking and Finance department, Nassarawa State University, Keffi, gave the tips in a position paper made available to New Telegraph.
“Mainstreaming the revised Capital Market Master Plan into the new ERGP will ensure that the growth of the capital market becomes a key policy issue going forward, including through the provision of fiscal incentives.
As you well know, a major challenge facing the capital market is the low level of retail investors’ participation, which is not unconnected with low capital market literacy in the country.
“The new SEC management should work closely with all the relevant stakeholders, especially the Association of Capital Market Academics of Nigeria to take capital market education to our educational Institutions,” he added.
Another vital issue, according to him, was investor confidence, which, he said, is equally paramount.
“This has improved in recent times owing to the efforts of the Commission in enforcing discipline in the market. I expect the new management team to sustain the tempo and minimise to the barest minimum cases of abuse and infractions.
“I have no doubt that the new SEC DG will bring to bear his experience at the CBN to work closely with the apex bank for a stronger regulation of the country’s financial system including proper regulation of the emerging fintec industry.
“It goes without saying that the new DG will need the support of SEC staff to succeed.
So, I expect him to take, as a matter of priority, the issue of staff welfare,” he said.
The Managing Director, Crane Securities Limited, Mr. Mike Eze, in a chat with New Telegraph, said for his appointment to bring succor to the comatose economic situation in the market at the moment, he must come up with enlightenment programme that will bring investors back to the stock market.
“For Yuguda, who takes over as DG of SEC, a lot is expected from him particularly bearing in mind the fact that he has a superlative training advantage having worked at several levels as a regulator as well.
“A lot needs to be done by him in order to cover lost grounds. As a seasoned technocrat, he does not need the services of consultants from outside SEC in place of well trained SEC commissioners, directors, deputy directors and other myriad of professionals available for strategy and operation by any DG of SEC,” he said. Eze noted that since education helps in improving financial literacy of investors, the most effective investor protection starts with a well informed and educated investor. He said that in the light of the lessons learned from the stock market collapse, there is a strong requirement for the new DG to strengthen the Exchange’s investor education and awareness function, especially for retail investors and also to facilitate the completion of the demutualization process.
Eze noted that despite the considerable gains being recorded at the Nigerian Stock Exchange currently, it is believed that if the tempo is to be maintained, the Exchange managers should continue to deploy available resources towards educating investors, particularly retail investors and creating awareness of the important function the capital market plays as an enabler of national economic growth and a wealth-creating avenue for investors.
To encourage and ginger the expansion of local investment base and make the nation’s capital market an investment destination in Africa, the continued implementation of the 10-year Capital Market Master Plan should be a major focus of the new management.