The Director General of the Security and Exchange Commission Ms Arunma Oteh will not be retaining her position for another term of four years. Oteh came into SEC at the height of the capital market crash in 2007 and has by and large helped to focus SEC as a respectable regulatory authority. Whilst no official reasons has been given for her departure, this may not be unconnected with her spat with the National Assembly two years ago. There have also been reports of her not being in very good terms with her tops executives speaking of which I thought it was poignant to report how SEC officially enumerated her achievements. Here it is;
Ms. Arunma Oteh Bequeaths a Much Stronger Nigerian Capital Market
Oteh’s tour – of – duty as Director General of the SEC Nigeria will be remembered for its passion, purpose, articulation and faithful implementation of a therapy of reform measures driven by the vision to transform the Nigerian market into world class market. She was in a hurry to see Nigeria achieve a world class capital market that would drive development and make Nigeria one of the most attractive investment destination.
Some of her accomplishments include:.
- Restoring Investor Confidence through strong enforcement actions and improvement of rules and regulations, and investor education. Creative initiatives include partnership with Nollywood to produce movies, an annual integrity award to promote integrity and capital market knowledge. SEC established the National Investor Protection Fund and strengthened its Administrative Proceedings Committee
- Deepening and broadening the market; The market witnessed significant product innovation, improved listing rules, landmark bond market reforms (which brought it almost at par with the equities market and made it attractive enough for Triple A issuers such as African Development Bank (AfDB) and International Finance Corporation (IFC) to issue bonds), introduction of Exchange Traded Funds (ETFs), widening of participation in the markets through licensing and coming – on – stream of other capital trade points like National Association of Securities Dealers (NASD) and Financial Market Dealers Quotation (FMDQ) that have expanded market access
- Restoring market integrity through zero tolerance for rule infractions. The SEC’s enforcement machinery was significantly strengthened to respond to this new emphasis. In addition to other measures, an 18-man Nigeria Police Force team was deployed as a resident enforcement team at the SEC to respond to enforcement matters with speed and promptitude. This was unprecedented in the history of the apex regulator.
- Strengthening disclosures and transparency; SEC, under her leadership strengthened disclosure requirements and spearheaded the implementation of international financial reporting standards for listed companies.
- Promoting good corporate governance; As far back as 2011, under Oteh’s leadership, the SEC published a new code of corporate governance for the Nigerian markets which was aimed at standards improvement in line with international best practice. In addition to a significant improvement in corporate governance, the code is now mandatory. SEC’s role in revamping corporate governance at Ecobank Transnational Incorporated(ETI) was globally recognized.
- Building capacity in the market: Within the SEC, capacity building took unprecedented heights intended to strengthen the capital market as a whole by specifically enhancing personnel and technological capacities at the SEC Nigeria through (re) training of human capital.
Pursuant to the human capital enhancement goal the outgoing DG streamlined the training function at the SEC Nigeria to make it more relevant and responsive to the apex regulator’s capacity needs; she instituted the SEC Learning Series with the objective to foster a culture of learning and knowledge seeking at the SEC Nigeria especially in relation to critical issues that relate to capital markets, economic diplomacy, macro economy and the larger society.
Beyond the capital market, under Oteh’s leadership, the SEC instituted an Annual SEC Journalists’ Academy, a skills improvement workshop aimed at strengthening transparency and accountability in the markets through improved professional journalistic reportage. A journalists’ only essay competition was also instituted to stimulate interest in reading and writing about the markets among Nigeria’s community of practicing journalists. Prize winnings at this competition are in the form of exposure to trainings in elite local and foreign learning centers. She created a forum for delivering capacity enhancement to shareholders in Nigerian companies called the “SEC Shareholders’ Academy” to enable the role of this important stakeholder public in fostering sound corporate governance in the Nigerian capital market.
Under her leadership, the SEC also championed reforms at the Nigeria Stock Exchange (NSE) which has witnessed much more robust output and delivery in its operator/oversight role. The initiative to revamp listing rules led to landmark transactions such as the dual listing of SEPLAT Petroleum on the NSE and the London Stock Exchange in April 2014 as well as the development of an alternative securities market.
- Improvement in governance and infrastructure of the SEC
Ms Oteh provided thought leadership on the role of the capital market as an enabler of socio economic development, an efficient mechanism for capital allocation, and for fostering meritocracy in the economy and ultimately peace and prosperity in the society through efficient resource allocation.
Her passion in seeing the Nigerian market become a world class one and the fulcrum of socio –economic development informed her leading a market-wide effort which culminated in the launch of the 10 year capital market master plan in November 2014 which supplies a strategic architecture for repositioning the Nigerian capital market as one of the best and biggest globally within the envisaged timeframe, re-focus the market and help double its size over time and grow the economy
The role and reputation of the Nigerian capital market in the International arena was significantly enhanced through SEC Nigeria’s greater visibility and contribution in international regulatory fora like the International Organization of Securities Commissions (IOSCO) and its Africa and Middle East Regional Committee (AMERC). In both organizations, Arunma Oteh played influential roles in their highest decision making echelons. The spike in the SEC’s reputation and renown has made both the apex regulator as well as Ms. Oteh serial winners of awards and laurels bestowed by local and foreign organizations.
She will certainly be remembered for rescuing the capital market from the doldrums in which it was mired as a result of sharp practices that were rife and the global financial crisis, soon after she assumed office in January 2010. From a market capitalization of N4.99 trillion in January 2010 and through therapy of reform measures catapulted the NSE capitalization to its peak of over N14 trillion in 2014. The Nigerian stock market which rose by 35% in 2012 and a further 47% in 2013 was also amongst the ten best performing markets in the world that same year.
Even though by end 2014, the NSE capitalization had regressed to 11.5 trillion on account of the combined macro – economic forces of dwindling confidence in the Nigerian economy by anxiety around the imminent general elections; plummet in the price of crude oil in the international spot market and decline in the exchange rate of the Naira which attended the recent adverse fortunes of crude oil, the sole foreign exchange earner in Nigeria’s mono – cultural economy, combined with cessation of Quantitative Easing in the all important United States economy to induce divestments of foreign portfolios from the Nigerian market; there is every reason to believe that the market will quickly bounce back after elections and with improved crude prices.
Even the most pessimistic observer would agree that the fundamentals of the market bequeathed by Oteh remain significantly sound. She has also left behind strong market institutions and a strong SEC Nigeria. SEC Nigeria has consequently earned global laureates including the Africa Investor Innovative Regulator for 2011, 2013 and 2014.