- The US – Nigeria Council for Food Security, Trade & Investment calls on the SEC to sort out its feud with Oando
- The Oanda v SEC saga has dominated business news headlines in recent weeks
- The saga will in many ways continue to impact the perception of Nigeria’s business environment and affect foreign direct investment
The US – Nigeria Council for Food Security, Trade & Investment, the body that promotes opportunities in Nigeria to US investors and advances commercial partnerships which contributes to economic growth of Nigeria, in a press release on 19 June, 2019, appealed to the SEC to end its current feud against Oando PLC.
The council stated that “Oando PLC, as a founding member of the Council and as an active and valued participant in the Council’s activities, plays an important role in promoting business and direct investment in Nigeria.”
The UNSC went on to say, “It is committed to strengthening the commercial relations between the United States and Nigeria, it recognises the importance that strong capital markets play in attracting foreign investment, creating new jobs and stimulating economic growth.”
This underlines the fact that if a regulatory body for the capital market is perceived to be stifling the market it will have a detrimental effect on the ease of doing business, business growth and sustenance, deter new business and international investment, all of which will eventually translate to economic decline.
The USNC further challenged the regulatory body to discharge its duties with due process and fair equitable treatment for all parties.
The role of the USNC cannot be over emphasised, according to the USNC Chairman, Ambassador Terence McCulley in a statement in March 2019 “The US-Nigeria Council (USNC) stands ready to play its role in the most important and dynamic economy on the African continent. As a convener, clearing house and catalyst for investment into Nigeria, the USNC will continue to promote expanded commercial ties between the United States and Nigeria.”
According to United Nations Conference on Trade and Development (UNCTAD), Nigeria – ‘Africa’s giant’ who currently sits on billions of proven oil reserves and a couple more billions worth of investment opportunities in the oil and gas sector – presents an astonishing decline in FDI of 36% in 2018 with FDI inflow into Nigeria declining from a high of $8.9 billion in 2011 to a derisory $2.2 billion in 2018.
This is hardly surprising as Forbes further highlights in a report written in May 2019 that “The equity investment in Nigerian between 2013 and 2018 has fallen from around $2.9 billion in 2013 to $139 million in 2018.”
To add to this, the Exchange Traded Fund (ETF) has dropped a whopping 74.5% in the last five years. Also, Nigeria’s highly praised, but ridiculously low ranking in the Africa Competitiveness Report by the World Economic Forum of 134th out of 144 countries is a serious pointer to how far the country has to go.
With figures like those mentioned above, it’s important that regulators like the SEC pay more attention to the importance of their roles in ameliorating the situation. Essentially, getting the market back on its feet is vital.
The market is disturbed, investors are concerned that there is a capital market regulator that seems to lack a corporate governance structure and seems to apply compliance, fairness and equality as they like, on their own personal discretion as opposed to approved, tried and tested processes and procedures.
These SEC’s behaviour has long term ramifications, which will affect the country’s image, and increase the perception of a country and people that have a lack of respect for the rule of law.
With the case gaining international attention, there is mounting pressure on both the SEC, and the Federal Government of Nigeria to ensure that the SEC’s treatment of Oando does not serve as a deterrent to the international investing community, especially at a time when the country is just getting back on its feet.