There is a good reason why the Securities and Exchange Commission (SEC) wants quoted companies to be availed fiscal incentives, and that is to reduce their cost burdens while encouraging more companies to list on the Nigerian Stock Exchange (NSE).
A reduction in the companies’ cost burdens would, in turn, translate to benefits for their shareholders. In the same vein, the proposal would ensure that quoted companies contribute more to Nigeria’s economic development.
SEC’s Acting Managing Director, Ms Mary Uduk recently made this proposal during an event in Lagos organised by the Alliance Law Firm, according to ThisDay.
According to her, this is important because in the event that companies fail to list their stocks on the Nigerian bourse, regulatory agencies like SEC will be out of business with no companies to regulate.
Speaking further, the SEC boss, who was represented at the event by a director at the commission, Mr Edward Okolo, stated that fiscal incentives would also encourage the drive to improve corporate governance in Nigeria.
She made this call on the backdrop of allegations by some local investors in Nigeria’s manufacturing sector who claim that the country’s “public procurement and contractual processes” continually favour their foreign counterparts despite them meeting all their fiscal obligations.
“Our case for fiscal incentives for listed companies on the NSE is actually based on experience. 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.”-Uduk
She also stated that the regulatory body does not wish to keep taking more money from Nigerian companies “because they incur a lot of costs and you cannot reduce the costs more than a limited amount of percentage.” In the light of this, some incentives would be given them.
“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?”-Uduk