Privatisation: ‘Listing Of Companies Will Deepen Capital Market’

Stakeholders have said that the on-going privatisation of federal government enterprises would deepen operations of the capital market as well as broaden participation of investors in the market.

The Privatisation and Commercialisation Act 1999 gave birth to the Bureau of Public Enterprises (BPE) with the mandate to implement the privatisation and reforms policy of the federal government.

Through the programme, some of the companies that were privatised and listed on the Nigerian Stock Exchange (NSE) include the Cement Company of Northern Nigeria (CCNN), Benue Cement Plc and Ashaka Cement.

Others are oil marketing companies such as Oando, Forte Oil and Conoil. Under the agro-allied sector is Okomu Oil Palm while under the food product, there is the National Salt of Nigeria, Northern Nigeria Flour Mill and Union Dicon Salt among others.

According to the director-general (DG) of the BPE, Mr Benjamin Dikki, privatisation has deepened the operations of the capital market and broadened investors’ participation. He said that it has increased listing of companies on the NSE and raised the market capitalisation by over 500 per cent in phase one alone, saying that it has also made the capital market one of the fastest growing in the world. According to him, privatisation has made the capital market key in terms of economic performance and management.

Meanwhile, stockbrokers have called for a review of national privatisation laws to enable more Nigerians benefit from the assets being privatised and ensure speedy listing of the companies. The president, Association of Stockbroking Houses of Nigeria (ASHON), Emeka Madubuike, called for the listing of more companies on the NSE, especially government-privatised agencies, to improve the depth of the capital market.

The managing director of APT Securities and Funds Limited, Garba Kurfi, blamed the federal government for the sustained shortcomings in the nation’s privatisation laws.

“Most of us support the privatisation policy of opening the nation’s investment space but with the provision that evolved, companies must be listed after a certain period.

“Honestly, government short comings has compelled us to support the National Assembly (NASS) current moves to make laws that will compel such companies to be listed at the NSE. The federal government incentives’ approach to the issue since the beginning of privatisation in 1999 has failed,” Kurfi said.

Accessing the privatised companies listed on the NSE, he said that the companies are performing impressively. Citing an example of Forte Oil, he said the company has been restructured and doing well after its privatisation.

“The federal government, through the regulators, must consciously overhaul the laws moderating businesses, especially businesses that are the bye products of the privatisation programme, to be listed on the exchange,” Kurfi said.

Recently, during his courtesy visit to the NSE, the BPE DG disclosed that the federal government recognises the role of the capital market in providing long term funding that will drive investments, in the transport sector, that will result from the reforms initiatives in the sector.

“Soon the roads, railways, inland waterways and the ports harbour bills will be presented to the Federal Executive council (FEC) for approval and transmission to the NASS for enactment,” Dikki said.

He believed that once enacted and relevant regulatory agencies set up, it will create an enabling environment for private sector investment in concession and PPP contracts.

“Similar reform initiatives in the housing sectors and agricultural sector through the privatisation of the Abuja Commodities and Stock Exchange will all throw up vast investment opportunities for the capital market to finance,” he stated.

He, therefore, promised that the BPE will continue to support and recommend initiatives to the Federal Government to ensure listing of enterprises through reforms and privatisation to deepen and improve the liquidity in the capital market.

Source : Leadership

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