Eric Akin Akinduro, the Chairman of Ibadan Zone Shareholders Association is one man, who is very passionate about the capital market development in Nigeria.
With his many years of experience in this sector, Akinduro said government should see capital market as a tool for the economy development.
In a special Interview with the Editor of Skybirdnews Group, Mr. Charles Nwaoguji, recently, he says multiple taxation is another major crises facing the capital market in Nigeria, adding that transactions charges are on high side particularly with the introduction of new VAT,
“Our withholding tax of 10 percent is on high side, this is also affecting the performances within the market, and inconsistence in government policies and over regulations are another major threat to the market,” he said.
He explained that, “ Investors have lost so much due to unfriendly environment where their companies are doing businesses and weaknesses of the board of companies to deliver expected returns. As a result of this, we have not been enjoying the expected returns on our investments.”
As an expert, Akinduro called on the government to create more enabling environment for the market to thrive
“Information releasing to the market by various government agencies should always support the market. Government should be more consistence in their policies toward the market. Issue of multiple taxation should be reviewed,” he added.
In this interview, he spoke on Challenges facing NSE, COVID-19, effects of the lockdown on businesses, area of palliatives to their members and other areas of interest.
Challenges facing NSE
Well, as we know NSE cannot be immuned from the happenings within the country and as a centre point, we have some expectations we are looking on to. Such as :
Vibrant market that can stand side by side with developed countries in terms of delivery and operations. This will increase the confidence of both local and international investors.
Multiple taxation is also one of the major crises we are facing in the market. Transactions charges are on high side particularly with the introduction of new VAT not only that, our withholding tax of 10 percent is on high side this is also affecting the performances within the market.
Inconsistence in government policies and over regulations – The market is bombarded with various regulations and inconsistence in government policies. Investors can not be sure of what next will be coming from government to the market that is why at times you see forces driving our market more than finances
Lack of Full and timely disclosure and transparency of the listed companies this is one of the challenges facing by NSE. Full and timely disclosure is very keen to the development of NSE. This will give armful opportunity to investors to make investment decision but in the absence of this full and timely disclosure, it will be difficult for the investors to make such decision.
What Ibadan Zone Shareholders Association stand for
The Ibadan Zone Shareholders Association was created in 1992 by the Bureau of Public Enterprises, BPE and incorporated under Part C of the Companies and Allied Matters Decree, No 1 of 1990, with perpetual succession and common seal.
The Ibadan Zone Shareholders Association is, one of the Seven Zonal Associations created to protect the interests of retailed shareholders in public-quoted companies in Nigeria. The seven zones were created where the Nigerian Stock Exchange has offices throughout Nigeria. The seven shareholders zones are located in Lagos, Ibadan, Benin, Port Harcourt, Onitsha, Kaduna and Kano. The Ibadan Zone covers Oyo, Ogun, Ondo, Osun Ekiti and Kwara states.
The Ibadan Zone Shareholders Association or IBZSA, for short, has since inception been active and is the most democratic Shareholders Association in Nigeria. I was elected the 7th Chairman of the Association in December 2016.
The aims of the Zonal are to undertake the education and enlightenment of Nigerian Shareholders on their rights and responsibilities as co-owners of public companies and to promote solidarity among the different individual shareholders, to stimulate their interest in the affairs of their companies and to contribute to the success of the companies in which we are shareholders and assist the management, through the board of directors, to achieve the corporate objectives of the company for a good return on our investments.
The IBZSA has a Help Desk at our Secretariat where we assist our members to resolve issues and complaints that may relate to their investments.
Our Zonal Association is involved in organising enlightenment programmes, seminars, workshops and similar activities, designed to inform and educate our members on the activities of the Capital Market.
To enhance the quality of our members’ investment decisions, we have a Shareholders Magazine, called The Shareholders Voice, that covers the activities of the Capital Market, with personality interviews and other related events. The Shareholders Voice is one of the avenues we use in educating our members on the benefits of investing in the capital market and becoming a shareholder.
Nigeria economy in COVID-19
Well, from the perspective of investor, Nigerian economy over the years has not been favourable to us because capital market which is one of the wheel driving the economy of this country has not been performing optimally. When you look at the value of our investments today viz a viz past years performances you will realise that it has not been favourable. Investors have lost so much due to unfriendly environment where our companies are doing businesses and weaknesses of the board of companies to deliver expected returns. As a result of this, we have not been enjoying the expected returns on our investments.
.How to tackle these challenges
The challenges could be tackled if fresh idea is introduce into the system and be sensitive to the plight to the players as to know their need and how to meet such.
Area of palliatives to our members
The area of palliatives expected from government is that government should create more awareness to the grassroots investors to participate. More enabling environment is also needed for the success of the market.
SEC must intensify activities to entice investors to embrace the E-dividend registration. Hurdles the retailed investors are facing before their dividends are paid should be reviewed. There should be synergy between the bank, registrars and other related party to protect investors and payment of their dividends. Also, payment of fees by shareholders for the e-dividend registration should be cancelled.
Standardisation of Registrars’ operation should be introduced, across board. This will help investors visiting several of them to solve issues in relation to registrars
Rules on transmission should be reviewed. Investors with small units should be given consideration because the transmission process, which is very hectic, has discouraged the families with small investments from processing them.
Effects of the lockdown
The present lockdown to us as investors did not have any negative impart on trading as the authority of NSE had seen this ahead and prepared for it. One of the characteristics of a good administrator or manager is to see challenges ahead before it turns to problem. The real time trading is very active and has helped investors to participate adequately during the lockdown. Imagine the appreciation we are witnessing in market during this lockdown. Every investor that participated in the market during this period should be smiling now because of the recent bullish trend in the market.
The lockdown affected every business because it was never envisaged but things are getting better now with the present bullish trend of the market
My take on covid-19 it is very important for everyone to keep safe and follow the required guideline for safety because it is the living that can count his blessing. It is a matter of time and it will soon be a thing of past.
Foreign direct investment in Nigeria
Without mincing word foreign investment is still very high and we depend on them because lack of proper understanding within the minority shareholders is keeping them away from the market. It is not the best for us to depend on foreign investment. They are the one dictating our market. Government should do something about this to encourage local participation.
Advice to Government
My advice to the government is that, they should see capital market as a tool for the economy development as a result of this, it should be handled as such. Information releasing to the market by various government agencies should always support the market. Government should be more consistence in their policies toward the market. Issue of multiple taxation should be reviewed,