Perhaps bowing to age-long pressure, the Securities and Exchange Commission (SEC) gave its support for some form of fiscal incentives for companies listed on the Nigeria Stock Exchange (NSE), in a bid to encourage other players.
Such concessions are expected to help mitigate their cost burden, translating to huge investment benefits for shareholders, while positioning such quoted companies for increased contribution to national development through improved capacities and job creation potential.
Acting Director General of the commission, Ms. Mary Uduk, who advocated such fiscal necessity, belief that some form of fiscal incentives will add further mileage to the ongoing efforts to improve corporate governance in the country.
Uduk, who was speaking on the sidelines of the Alliance Law Firm’s maiden lecture series, luncheon and book presentation with the theme ‘Contemporary Corporate Governance Issues in Nigeria’ in Lagos last week added that such argument is based on experience over the years.
The Acting DG, who was represented by the Director, Zonal Offices Coordinating Department, (ZOCD), Edward Okolo, cited experiences with operators in the manufacturing sector, who lamented that despite fulfilling their fiscal obligations, Nigeria’s public procurement and contractual processes continue to favour foreign companies to their disadvantage.
“What we are saying is that Nigerian companies doing the same business these foreign companies are doing, if they are listed, should be encouraged in terms of public procurement or whatever government is doing.
“We don’t want to keep taking from them because they incur a lot of cost and you cannot reduce the cost more than a limited amount of percentage. The best is to begin to give them some incentives and with that you have more companies coming to the market, you have more jobs and then people will have dividends of investing. You must have companies to regulate and if people are not coming to the market, then who are you going to regulate?
“The market will create jobs. If you go to Brazil, you go to Asia you see small scale companies coming to the market. You see fund managers and others playing the roles they are supposed to play. So, we need those incentives to encourage them to come to the market” Uduk added.
At the end of the day she said, Nigerians will get the value in terms of dividend payout, if the company is listed adding that there should be incentives for companies coming out to get listed so that there could be alternatives to savings by Nigerians.
Speaking earlier on the level of observance of corporate governance code by listed companies as part of the panel, the SEC boss disclosed that level of compliance with the SEC Code 2011 remained low even as provisions relating to independent directors’ roles in companies were being violated by some listed companies.
In addition, the SEC’s boss lamented that access to critical indices by which companies’ compliance with the SEC Code could be measured remained difficult as many companies were either unwilling to comply or lack understanding of the importance of corporate governance to their entities’ survival and profitability.