Private Coys Listing Bill to build strong institutions  -Rep

Azubogu

The sponsor of the 'Private Companies Conversion and Listing Bill 2013 and Deputy Chairman, Capital Market Committee of the House of Representatives, Hon. Chris Azubogu, has urged Nigerians to ensure that the bill is passed into law as it will build strong institutions for the nation.

According to Azubogu, , who stated this during a media parley in Lagos, his decision to sponsor the bill, which seeks to compel top companies to list on the  Stock Exchange, is to ensure that the country has stronger companies that are well supported and run.

He explained that by listing on the NSE, top companies would have increased access to funds leaving the banks and provide liquidity to the real sector.

The Bill is seeking enactment  of “An Act to provide for the private companies whose shareholders' funds exceed N40billion or its annual turnover exceeds N80billion or its total assets exceed N80billion to convert to a public liability company and get its shares listed on the stock market, thereby promoting growth for both the company and the Nigerian capital market and related matters."

Azubogu disclosed that the bill has already passed the second reading at the House of Represetatives, adding that the Act, when enacted, will not only be in the best interest of Nigerians, the capital market and the country at large, but that it is also in line with the provisions of the Constitution.

He said that a public hearing on the bill is expected within the next 45 days, expressing optimism that, with the support of Nigerians, the Bill, whch also provided for tax and listing waivers for companies, would be passed into law.

His words: "It will give us room to have what is called complete financial inclusion; to move away from the informal sector to formalise our economy, to account for the strength of economic activities going on in the country.

"For instance, with the rebased GDP of $500billion, the market capitalisation of the Nigerian Stock Exchange is less than $100billion. So, if our GDP ratio to the market capitalisation is less than 20 per cent, It means that over 80 per cent of our economy is in the informal sector. it would be difficult therefore to account for productivity and for government to put basic things in place.

"Also, if government decides to privatise all the businesses and they are not complying with the laws of the land, how can government even confirm that they are collecting the right tax? The tax collection to GDP ratio is weak because we don't have strong institutions."

He explained that his action was specifically influenced by the provisions of Section 16 of the Constitution, which provides, among other things that a body shall be set up by the National Assembly, which shall have powers to review from time to time the ownership and control of business enterprises operating in Nigeria and make recommendation to the president on same; administer any law for the regulation of the ownership and control of such enterprises.

Azubogu also said the goal was to help the country build strong institutions.

He stated, "One of the reasons why we have not fared very well is that we are a large country and if we don't have strong institutions that will regulate what we are doing to make us comfort and comply with rules, it becomes difficult for us to grow well.  If there are loopholes in our laws, we must correct them if not, anyone can come into the country and exploit those laws and abuse our system.

"Over time government has tried to divest from the key areas of the economy, but services provided by companies in those sectors are so entrenched that if government does not regulate them very well, it does not help the economy. Laws are dynamic and they are changing every day and every loophole that people find, they will abuse it and who pays the ultimate price? Nigerians."