Recently, the speaker of the House of Representatives, Yakubu Dogara, re-echoed that the House may have to legislate to compel multinational oil and gas and telecommunications companies to list a certain percentage of their shares on the Nigerian Stock Exchange (NSE). The speaker posited that big, multinational companies that derived huge revenues in certain sectors of the economy must be compelled to list on the capital market so as to deepen the market and make capital available to investors and create employment.
“Apart from the capital inflow sought, the market needs to be deepened, as most of the big international companies in Nigeria are not participating in the Nigerian Stock Exchange. This is sad, because these companies account for a huge percentage of revenues in oil, communication and energy,” Dogara was quoted to have said during a meeting with members of the Nigeria-United Kingdom capital market project.
It would be recalled that the idea of compulsory listing of shares of telecoms and multinational companies was initially mooted by the previous House of Representatives Committee on Capital Market and other institutions. According to the committee, “Nigerians have to benefit from the millions of dollars of profit these companies make annually from them; they have to become part owners through the listing of the companies on the NSE. The companies can give up a percentage of their ownership, it can be 5 percent, 10 percent or 15 percent; let there be something for Nigerians to own” (The Punch, Tuesday November 29, 2011).
The issue of mandatory listing of telecoms and multinational companies on the bourse was also brought to the fore during the visit of former President Goodluck Jonathan to the floor of the NSE when stockbrokers solicited his support for the enactment of legislation by the National Assembly to effect the proposal. According to the stockbrokers, mandatory listing of telecoms companies and other multinationals, including some government organisations and parastatals being privatized, would further deepen the Nigerian capital market making it the largest in Africa in tandem with the country’s position as the biggest economy in Africa.
Plausible as the various reasons espoused for the mandatory listing of shares may seem, it is my considered view that, since there was no legislation or regulation in place at the material time the telecoms companies invested in the economy, the enactment of any such legislation now compelling them to list their shares on the stock exchange, no matter how well-intentioned it may appear, is an ex post facto punitive measure that is tantamount to shifting the goalpost in the middle of the game!
Rather than the force of law, a better and more pragmatic approach, in my opinion, would be through moral suasion by engaging the telecom companies in dialogue to persuade them to voluntarily divest, relinquish and give up a percentage of their ownership structure by way of public listing of their shares on the bourse. However, going forward, legislation might be enacted to compel new, potential investors in certain sectors of the economy to list their shares on the stock exchange. But, even at that, it must be said that not all companies would want to go public. Some companies may prefer private listing to public offer. In a deregulated, free market economy, the issue of whether to do private listing or public offer is solely and entirely the prerogative of the company or investor and not one that should be externally dictated by administrative fiat or imposed by the force of law. Concomitantly, any form of coercion or compulsion as being proposed will amount to unwarranted government regulation and undue interference in the internal operations of the companies with inherent, attendant legal implications. Such an action will also be inconsistent with the avowed deregulation policy of the government and may, unwittingly, send a wrong signal to the business community, especially foreign investors, that the government is trying to arm-twist them into another form of indigenization programme or nationalization exercise reminiscent of the one which took place under the abrogated Indigenization Act (Nigerian Enterprises Promotion Decree) of 1972 and 1977.
Furthermore, the move may be misconstrued as government’s new policy direction towards a public-controlled or regulated economy. This will not augur well for the country as it may discourage foreign investors, especially at this time when strenuous, concerted efforts are being made at stimulating and attracting investments into the country. In this regard, mandatory listing may end up being anti-investment by scaring away potential investors and, by extension, ultimately hurting the growth of the capital market.
Again, even if the shares of these companies are publicly listed and offered for sale, there is every likelihood, considering the current economic adversities and debilitating level of poverty in the country, that the offer will end up a zero-sum game which will be manipulated, hijacked and cornered by a few rich and privileged Nigerians, together with their cronies, while the average Nigerians for whom the proposal is being touted will, paradoxically, end up not benefitting!
In conclusion, therefore, rather than dissipating efforts and pandering to populist sentiments on the mandatory listing of shares of the telecommunications companies, which I consider a skewed proposition and an unnecessary diversion/distraction, the linchpin issues that ought to be of priority concern to the National Assembly as well as relevant government agencies, as recently directed by President Buhari, should be how to address the poor quality of service (QoS) by the telecoms companies, especially their dysfunctional customer services, including sharp practices and unbridled exploitative tendencies in terms of seemingly high, excessive, spurious and frivolous charges, false debits/deductions from customers’ accounts and, in some cases, double-charging, incessant poor network connection/congestion and drop calls, poor data services, the barrage of unsolicited and irrelevant SMS to customers on a daily basis, among others.
The Nigerian Communication Commission (NCC) and other relevant agencies of government should open up discussions with these companies, particularly with regard to mobile telephony – which has been the dominant sector and major driver of growth in the industry – with a view to ensuring that they put in place adequate platforms and efficient structures to enhance their service-delivery capacity. In this direction, concerted efforts should be bolstered by the telecoms companies to expand and effectively extend their services to the “massive untapped market potential” in the country, especially in the areas of broadband infrastructure deployment, including accessible and affordable mobile data, internet and financial services. This, I believe, will be the most significant and ideal way that Nigerians can effectively and meaningfully benefit from their services.
KAYODE OLUWA
