By Sam Eyoboka
The House that Apostle Hayford Alile built, the Nigerian Stock Exchange (NSE), appears to be collapsing just 10 years after his retirement from that all important institution.
There are mind-boggling stories of alleged financial impropriety, in-fighting that led to the recent tremors in the place. We went in search of the pioneer Director-General of the institution to feel his pulse about the happenings at the Exchange.
He obliged us the opportunity though he wanted to be left alone because it was the birthday of his heartthrob, Deaconess Pat Alile, and a number of the children were hanging around, waiting to mark the day. The following is the outcome of his conversation with Vanguard.
Let us talk about the recent crisis at the Nigerian Stock Exchange which took you years to build. What is your assessment of the current situation there?
We ought not to see what we are seeing now. The atmosphere is polluted and the incidents people are not supposed to hear are the things we are hearing today considering the way the Stock Exchange is structured.
We started off with the Lagos Stock Exchange and a lot of people outside Lagos thought they were just under the licence of Lagos and that the best thing was to change the structure and we did. Initially, they thought it should be a department under the Federal Government and I disagreed because the Stock Exchange is primarily a private sector/independent body that must be autonomous. And we encouraged the then Federal Government to set up an apex institution that will be supervising the capital market, which started with the name Capital Issues Commission and later converted to Security and Exchange Commission. Two, The Lagos Stock Exchange was then asked to come up with a Nigerian name that would make every Nigerian have a sense of belonging.
At that time, we had the first Nigerian chief executive of First Bank, the late Chief Samuel Asabia as the chairman. The then Minister of Finance made overtures to us then to change the name,
The Lagos Stock Exchange to something much Nigerian and we arrived at the name, the Nigerian Stock Exchange and the membership should be open to all Nigerians who have demonstrated some sense of integrity and have some idea of how the financial system in the world works. Two, he or she must have another constituency of stock brokers; and some of the financial institutions that have regional affiliations that can be identified with certain regions of the country. Companies like the New Nigerian Development Corporation in Kaduna, O’dua Investment in the West and an investment company in the East were brought in.
And of course, for the federation we had the Nigerian Industrial Development Bank and we agreed that we should have zonal branches in Kaduna, Onitsha and Ibadan while the Lagos branch serves the interest of a cross section of ethnic groups in Lagos. What we agreed was that the chairmen of these branches automatically become members of the governing council of the NSE while the Lagos chairman serves as the president.
The vice-president was selected from among the regional chairmen. After Chief Asabia, we had somebody from the North as the first vice-president while another from the East became the second vice- president. The president was given a three-year tenure. Within those three years, the expectation was that the two vice-presidents would have adequately acquired sufficient knowledge of how the Stock Exchange works; and once the president had served his term, the first vice-president is eligible for election to the office of the president. The second vice- president would have had at least six years to study the operations of the stock exchange before he can emerge as the president.
So, what is happening now may have arisen from an incident when the first vice-president before Alhaji Aliko Dangote, declined to be president on account of old age.
The NSE was then obliged to search for a new first vice- president from the North and that was how Dangote, a very matured businessman, emerged as first vice-president.
In the interim, there was an idea we have been toying with over the last 10 years which proposes to make the Stock Exchange a corporate entity that could be quoted on the Stock Market. That would have melted down the whole structure of the body because we would then have chairman and managing director of a quoted Nigerian Stock Exchange. All those things were not implemented though I kept warning before I left the place that the concept started in Australia and it took them a number of years to perfect. New Zealand followed and the London Stock Market which took almost 10 years. The New York Stock Exchange almost the same thing.
Why the hurry? I have the impression that some people wanted tenure extension. So, you can see the whole gamut of problems which were yet to be settled when suddenly a competition erupted that Alhaji Dangote cannot be the president.
A lot of people including myself, had to stand up for him to emerge president; otherwise you will collapse that place. Some of us had put in a lot of sacrifice. My first two years at the Stock Exchange, the then Head of State, Gen. Olusegun Obasanjo told Chief Asabia that we must indigenise, not only the equity of the banks, but also the managements as well as the bonds. And Chief Asabia approached me with a proposal to move to one of the banks, Union Bank, as its chief executive but I told him, ‘you’ve brought me here and I’ve not made any mark yet.
I cannot move across.’ My salary then was N9,000 which was not enough for the lunch of a Union Bank chief executive and we agreed that I should remain and do whatever should be done to make the Nigerian Stock Exchange as viable as possible. That was how we got Paul Oguma, the then most senior Nigerian in UBA to move over to the Union Bank.
I also thought that, apart from the hasty effort to transform the NSE to a public company, I felt there was the need to make sure our finances were in good shape. It was in the midst of that confusion that some of us said let Alhaji Aliko Dangote be the president of the NSE and he was unanimously elected but some people were not comfortable and they had to go to court—something alien to the Exchange. But that is human society!
I think a combination of those two things must have created a problem for the institution and a lot of brokers whose livelihood depends on the institution. A lot of the sacrifice some of us made in making that place a viable institution, it appears, are being damaged, but that institution, whether we like it or not, is very crucial for wealth creation of this nation and therefore must be protected.
In years past, it has done very well for investors, the corporate industry and the nation as a whole and we should be cautious and must tread softly not to destroy the place.
There were stories that Dangote was opposed for his alleged role in the AP shares brouhaha. If that is true, what is the implication of the current development?
There is a lot of ignorance about what is happening in the place. The man was on his own when people approached him to become a member of the board with a view to grooming him for the presidency and he did that for three years. I heard he and his friend, Mr. Femi Otedola had some disagreement on the movement of AP share price; I was not in the country then but I later heard that the matter was looked into and he was exonerated. If he was not exonerated, he would not have been qualified to vie for the presidency of NSE.
He was nominated and his election was unanimously accepted. I pray that that issue has nothing to do with the current impasse.
I don’t know what other things are involved because I kept talking to the erstwhile D-G who was the returning officer at the said election. Because of her position and her duties at the NSE, she could have disqualified and stopped the nomination of Alhaji Dangote if she had a good reason to—she is a very bold woman. She could have stopped the election.
You were the one that hired her, what is your assessment of the immediate past D-G?
She is a hard worker and very bold. She is very passionate about the NSE. She was sent to me by the late Sir Mobolaji Bank-Anthony who saw her in New York where she was working for the New York Stock Exchange and felt she would be useful to the NSE and we encouraged her to stay with us after the initial interviews. In the areas where she was lacking, we sent her out for training. I always made sure at that time, that there were three persons who could succeed me at any given time and she was one of them. About 18 months to my retirement, I told my president at that time, that I had two candidates—the late Henry Ogirri and herself as possible successors.
Unfortunately, just after that moment, Ogirri passed on and after his burial, the issue of successor became heightened and some Council members were not too convinced that a lady could handle the responsibility despite my assurances and they made me tarry for additional eight months. On their own, the council members found out that she was capable and that was how she emerged. She caught on and worked hard to make that place grow and prosper. She told the nation that she was due for retirement in November but unfortunately, I learnt she never wrote a letter to that effect and there was a possible dragging of feet somehow. Otherwise, she did quite a lot of work for that place.
With the benefit of hind sight, do you regret recommending her for the D-G job?
No! Not at all! It’s almost 10 years now and a lot of things have happened since then. At that time she was the best qualified. At least for the first five to eight years that I kept track of the NSE activities, there was no reason to regret.
But how do you feel about what is happening now?
I feel very bad. Sad! It is an institution where I spent quite a lot of energy, wisdom and time. I feel bad but I’m pretty sure that with the infrastructure in the place, especially for the Market itself, it is not an easy thing for anybody to destroy.
That, I can tell you. The chief executive can be out of that place for months and the place will continue to run. The place is auto-drive. The Central Security Clearing System is also part of the project. It is all very well put together and I am sure they would have expanded their capacity since then but both institutions were automated before I left that place.
With the security measures you have talked about in place, how possible is it for NSE chief executive to mismanage over N9 billion?
I don’t know. The council meets much more regularly now than when we were there and I therefore felt that the council ought to call for statements of account from time to time. That matter is now before the courts and I will not want to talk much on it but the system was built in such a way that we all knew our boundaries. If all those boundaries have been collapsed, I wouldn’t know.
What are the implications
for the economy, especially when the banking reform is still undergoing credibility test?
The implications are negative in terms of losing the confidence of the investing world, but if we handle the matter quickly and with maturity, we will not feel the impact much.
I think SEC, in particular, needs to handle the matter very quickly. Secondly, there is always the tendency for governments all over the world to think that such an institution like the Stock Exchange can be put under the belly of government and take us back to pre-indigenisation days.
The danger can easily be avoided by SEC quickly cleaning up the place and getting the place to elect its officers as quickly as possible. The current development shows that all these things are inter-related and when it triggers off, the financial spectrum—the short end which is the Money Market (Banking) to the long end which is the Capital Market (Stock Market)—must feel the impact. It shows that we are not moving fast enough that is why it triggers off at this short end and quickly unwinds here and you can feel the heat in all sectors.
The earlier we can resolve this matter, the better for us. There is hope for the Nigerian economy if we move a little faster to resolve the current lull because we are at the worst point in the valley of depression and we have no other place to go than to climb up. If the economy is climbing up, the banks will be forced to lend again and the Capital Market will be forced to activate itself and render services as it is supposed to do.
In every sector of the Nigerian
economy, corruption appears to be the bane of our development. What is your panacea for the eradication of this monster?
I have consistently blamed it on our educational system. When the military intervened in the governance of the country, they felt that government should take over the nation’s schools only to find out that they could not manage the schools. There is no way you can legislate morality by military fiat. The schools that were set up by Christian and Muslim missionaries were taken over by government and since then, morality and integrity had completely broken down in the country.
The fallout from the government take-over is what we are seeing today where human life means nothing anymore. People kill their fellow countrymen and women without appreciating that they have no right to terminate a life they did not create. The earlier governments can hand over these schools to the missionaries, the better for this country. Our children who will soon take up leadership have to be raised on sound moral grounds so that they can grow up to build a nation of our dreams. That is on the long-term.
And for the next generation of the nation’s leaders, the onus will be on the current leaders to amend, what I will call, the corridors or boundaries in such a way that such corridors can react to some of the behaviours of our corrupt leaders that we have now.
Examples must be set of those that have genuine cases of corruption against them. They should be prosecuted and sentenced accordingly so that the young ones who will take over from them can appreciate the need to govern the nation without stealing from the common purse. That way, they can hold back and discipline themselves and the Judiciary which has done quite a lot in the last couple of years must brace up to the challenge so that they can turn things around.
There should be no sacred cows. The war against corruption must be a joint effort of all Nigerians because in recent times, we have seen villagers together with their traditional rulers marching and protesting the arrest of their citizen by the Police Force. This is sad and that is why all Nigerians must join hands to arrest the development because corruption is creating a lot of poverty among the citizenry. Monies meant for the development of the country are withdrawn or underspent for such projects while huge sums find their way to private accounts abroad. The country is in a serious dilemma.
The aviation industry that one thought was coming up very robustly has recently been reported to be very weak; the rail sector collapsed completely though this administration appears to be trying to revitalise it. If we are able to get the rail sector working again and we are able to move goods from the South to the North and vice versa, it will help the country to develop a lot faster. Our roads are in a shambles and that creates a tremendous impact on our economy. Why can’t we clear goods from the Ports in 24 hours as other West African nations are doing? Manufacturers are in pains because of the demurrage on raw materials at the ports. The list is endless.
You have also agreed that the emergence of Goodluck Jonathan as the president is divine?
Very very divine; otherwise we would have been using cutlasses and hoes to batter ourselves in the last few months. We thank God for His intervention and He will continue to intervene on behalf of the populace and this country.
As we approach another
election year, there had been agitations in the North for President Jonathan to step down for the northerners to complete their two terms. What does this portend for the nation?
I hope those who are agitating, wether in the North or in the South, look for the right platform to agitate; and the right platform is the platform of prayer—telling God that His will be done in our lives. If they do so and what they have in mind comes to fruition, we will all settle for God’s will. But I believe that Nigeria is a country led by God, otherwise we have gone through a lot of crises and just as we are about to fall over, something comes up. Just like the late President Umaru Musa Yar’Adua’s ailment and eventual death which opened the doorway for President Jonathan.
If Yar’Adua were to be alive today, I am sure Jonathan would still be as loyal as you can ever imagine. He was elected on the same ticket with the late Yar’Adua and the National Assembly was very sensible in making Jonathan to continue with the ticket and I imagine that 2011 is a continuation of that ticket. We are all Nigerians; four years will not kill us. Within four years, he completes his term and another group will take over. The PDP zoning formula is not supreme to the nation’s constitution. We have to be very careful in the way we handle the issue of zoning in the PDP and pray hard for peace in the country. We should not turn this thing into a religious debate.
In other words, you will support Goodluck Jonathan running for president come 2011?
I will support what God says. I am a church leader and we are praying. If it is Goodluck, the will of God will be done and if it is another person; thy will be done oh Lord!
What do you consider the greatest challenge facing the Independent National Electoral Commission (INEC) chairman?
I think for clean, credible elections next year, we must have fresh voters’ register. If we need to extend the election date to achieve that, so be it. The society belongs to us. Nobody is going to impose situations on us.
We can go back to the National Assembly to ask for a few months extension if the need arises, so that we can have a transparent and acceptable voters’ registration exercise which will in turn guarantee free, fair and credible elections next year. Nobody has the right to stampede us into any situation in the nation.