CMR Recommendations to the National Economic Conference


The Nigerian Capital Market Roundtable
(CMR) is a meeting point for all
categories of past and present operators
in the Nigerian Capital Market. It is
non-governmental and non-profit. The
Forum is a voluntary Think-Tank made-
up of tested professionals with genuine
passion for best practices, the
development and growth of the Capital
Market in Nigeria. The Platform is
structured to serve as an intellectual
power house in the Nigerian Capital
Market for the good of a vibrant
national economy as a going concern.
Members of the CMR deliberate on
national economic and contemporary
issues through an online interactive
portal, 24×7 all the year round. In line
with the Charter of the Forum which is
evoked as the need arises, the CMR
resolved to avail the Federal
Government of Nigeria with the
relevant extracts of ongoing
deliberations in The Forum through the
convened National Economic
Conference (NEC).
Thus, the submission of CMR is
articulated under Economy and Capital
Market with specific subheadings of
relevant economic indicators that the
deliberations covered.

The dwindling fortune of the Nigerian
economy due to an unprecedented fall
in the oil price which is the main
foreign exchange earner, rising
unemployment, declining growth in
GDP in the successive past quarters an
indication of an economic depression,
widening balance of trade deficit and
unchecked fall in the value of naira in
the parallel market which resulted to
call for the devaluation of naira. All
these have generated debates from
which the following deductions arose as
a form of recommendation to the
Federal Government of Nigeria from
the Capital Market Community.
The CMR is not unaware of the fact that
the government is not short of ideas on
the way of the economic situation.
Consequently, this white paper is not
only highlighting the real issues but to
some extent articulates the steps that
could aid effective implementation
which is the bane of the expected
breakthrough for the Nigerian economy
on a lasting note.

Diversification of the Economy:
The Nigerian economy cannot be
sustained by oil alone; we must alter
the economic course by producing
more of what Nigerians consume.
Though we are yet to achieve domestic
self-sufficiency in cement production,
yet the replication of strategy in this
sector in every industry in which we
have resource endowments becomes
inevitable for the Nigerian economy to
grow. CMR strongly recommends that
the automobile industry be looked into
for implementation under the
diversification and import substitution
strategy. The automobile industrial
sector has about 3,000 components that
can be progressively manufactured in
Nigeria. Let us go for it now.
If the diversification strategy is
carefully implemented, we can catch-up
with what has been missed out in the
LNG project since 1983, Nigeria can still
regain its achievable position of being
the hub of Volks Wagen African
production and the likes of Dunlop and
Michelin can find their ways back in
Value of Naira:
An economy that grows in strength is
bound to impact positively on the value
of the currency. A strong Naira that will
endure is not going to be the one
determined by the CBN but by a system
that allows the currency to
progressively appreciate as we
strengthen our economy. Nigeria must
avoid using her reserves to defend a
currency value that subsidizes
consumption of foreign goods and
services while constituting disincentives
to those who can export goods. It
amounts to economic contraction if the
dollar receipt of Federal Revenue which
State Governments depend on is
translated into Naira at N199, while the
imported goods and services they
consume reflect the parallel market
The solution rests with focusing more
on boosting domestic production:
· By producing more of what we
· More of material we use to build
our houses;
· More of material we deploy to
construction of our roads;
· Nigeria should become No1
exporter of cocoa and manufactured
cocoa products;
· Start exporting refined petroleum
products and petrochemicals from
oil and gas;
· Stop importing vegetable oil and
other similar products we should
produce locally
The challenge of dual exchange rate
includes arbitrage and abuse by those
who have access at preferential rate
who are not angels after all. No matter
how well meaning the President is, he
cannot monitor everyone under him or
regulate the behaviour of those who get
favoured treatment (justifiably or not)
and then turn around and “round-trip”.
A fair system as much as possible is the
best way out of the situation and this is
what this administration should go all-
out to achieve.
The Government must be firm on what
will be allowed as imports and the
appropriate tariff for importable items.
Through a guided deregulation,
Government should realistically
determine what we want to support in
the official market and free the market.
Let the market determine the rate at
which eligible transactions access the
dollar. In essence, the system can
influence the supply and demand for
foreign currency yet allow the market
to determine the equilibrium price.

Devaluation of Naira:
Any official devaluation of Naira should
not be done in isolation. It has to be
accompanied with tested initiatives that
will ensure that Nigeria does not end up
like the SAP years with the Naira
constantly depreciating. Government
must be fiscally disciplined, set out
clear incentives for local resource-
based manufacturing and with a
combination of example setting and
trade instruments change the
consumption culture (not just food but
in all things, consuming what we make
and shunning what we do not make ). We
must also return to planning our
economy whereby the Government
provides incentives for activities in a
rational manner to ensure input-output

Integrated Restructuring of the Economy
and the System:
The Government should invest more in
technical education at all levels,
encourage faster domestic capital
formation, supplemented with foreign
investments (yes, foreign investments,
preferably direct), in ten to twenty
years the economy will be radically
transformed. The nation needs true
transformation that will create more
Dangotes. We will be looking for people
to employ and the speculation in
international circles will be when
Nigeria will revalue its currency.
Nigeria should learn from the history of
South Korea, China and India. Yes we
can; it would only take sincere
leadership and commitment to a lasting
vision that will deliver Nigerians and
take the economy me to desired level.

Every operating environment has its
own peculiarities. A capital market that
will entrench lasting effective and
productive policies that will contribute
to a vibrant economy must factor into
consideration the foundation of the
market by essentially putting into
consideration where they were coming
from, where it is now and where it
should be as a going coning concern in
view of a continuously changing
operating environment.
Nominal players in all tiers of the
market have a unique place in the
evolution of the Nigerian Stock Market.
Any policy that will phase out this deck
in the system out-rightly may not augur
well for the market and the national
economy. A fruitful nation that will
sustain a vibrant economy creates a
political and economic space capable of
re-jigging its commitment rules without
stifling productive enterprises of the
formal and informal players. In essence
there should be room for small and big
players to ply their trades in an
effective and well structured manner all
other things being equal. A Capital
Market Structure that facilitates a
transparently fair system as much as
possible has no rival; it is the ultimate
and the recommendation of the CMR.

Blind Trust:
There is no mention of Blind Trust in
any of our laws but the issue really
goes beyond mere terminology. The
issues are whether the underlying
concept involved is consistent with
Nigerian law and helps to resolve the
conflicts from legal point for Nigerian
political office holders.  In the CMR
legal view, the underlying concept is
consistent with Nigerian law and helps
to resolve the conflicts in
question. However, it is not simply
about fully giving up one’s power to
manage assets.  It is no less important
about ongoing beneficial ownership,
about empowering the trustee freely to
dispose of the assets entirely at its
discretion such that the person creating
or benefiting from the trust cannot be
sure at any given time whether or not
any given asset is still in the trust and
still beneficially owned by him.  Under
the terms of the Trust, if the trustee
cannot freely sell the asset then there is
no “blind trust” in the relevant sense.
The defining factors that must be
guaranteed to effectively set up a Blind
Trust include:
· Can we find any institution
within our political and legal
systems that can ensure that any
trust property declared by a
public official becomes
completely removed from under
his influence?
· Can a settlor be totally blind to
the nature of the holdings and
investments made by the trust
· Can the settlor be effectively
prevented from having
communication with the trustees
with respect to the trust property
under the Nigerian
A Nigerian official is not obliged under
any law to so declare a Blind Trust of
his assets before filing them at the CCB.
The CCB is not mandated to monitor or
prevent public officials in Nigeria from
dealing with their assets in whatever
manner they choose while in office; all
that is required is that notices of
transfers of interests affecting these
assets be given to the Bureau. The
Nigerian structure does not even
recognize that a trust arrangement
creates any blindness, as exemplified by
Paragraph 13 of the Fifth Schedule to
the Nigerian constitution
It is true that public officers can
appoint professional trustees, such as
Fund Managers and Investment Banks
etc. to manage their assets, especially
portfolio investments, while they
occupy public offices. The question is
will a Trust Deed so executed in
accordance with the relevant provisions
of the Investments and Securities Act
2007 (ISA) operate as a Blind Trust?
Does anything under Nigerian law
prevent a public officer who is a settlor
of such Trust Deed from influencing the
trustee’s choice of investing in a
particular Unit Trust Scheme, Real
Estate Investment Trust or any form of
Collective Investment Schemes? If the
answer is no, it then appears there
cannot be a Blind Trust validly set up in
Nigeria in the same manner as is being
done in other jurisdictions.
Our local circumstances may not permit
a truly Blind Trust. First, there is no
legal and regulatory framework in our
system established to govern the
structuring of such a Trust, in a way
that will make the settlor completely
blocked from information about the
holdings in his trust portfolio, or from
influencing managerial decisions of
administrators of his trust. To therefore
rely on an individual’s sense of moral
probity and adherence to values and
the ethics of public office, without
putting in place effective legal
machinery to regulate their conduct is,
at best, an exercise in futility.
Recommendations on Blind Trust
· Reforms should be made to our
public service rules to provide for
legal instruments that will clearly
provide for and guide the
declaration of Blind Trusts for
public office holders, besides the
constitutional requirement of
declaring their assets at the CCB
or relying only on their integrity.
This will not only promote the
sanctity of public office and the
image of public officers, but also
bring ethical certitude to our
legal system.
· Public office holders are advised
to always and promptly inform
their appointor, wherever the
possibility arises of a conflict of
interest in their duties vis a vis
the contents of the asset
declarations they make to the
CCB. Similar to what directors of
public companies do as required
under the Companies and Allied
Matters Act 1990, they may,
having declared possible conflicts
of interests, choose to stay clear
of transactions or offices that
could compromise their integrity.
We do not have the Blind Trust
arrangement that can do this at
the moment.

The membership comprises of those
whose email addresses have been
enlisted at one time or the other from
inception of the Forum in 2008 till date.
They follow deliberations and share
their informed thoughts on topical
issues as the need arises from time to
At the initial stage, the Forum was
restricted to Chairmen, CEOs, Managing
Directors, Executive Directors of
Companies and Partners of Professional
Firms that render services in the
Capital Market. This has been reviewed
to accommodate other senior
management staffs of these relevant
organisations as well as the regulatory
institutions in the market (all caveats
noted ).


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