Nigeria 2017 | FINANCE | INTERVIEW

TBY talks to Oscar N. Onyema, OON, CEO of the Nigerian Stock Exchange (NSE), on creating the second-largest platform in Africa, the advantages for indigenous companies to list, and how to institutionalize the fight against corruption.

Oscar N. Onyema
Oscar N. Onyema, ONN was appointed CEO of the NSE and a member of the National Council in April 2011. He has 20 years’ experience in both US financial markets and the Nigerian information technology sector. He is Chairman of Central Securities Clearing System (CSCS) PLC, President of the African Securities Exchanges Association, and a Global Agenda Council member of the World Economic Forum. He also serves on the boards of all subsidiaries of the exchange, the National Pension Commission of Nigeria, and FMDQ OTC. He completed the Advanced Management Program at Harvard Business School, has an MBA from Baruch College, and a BSc from Obafemi Awolowo University, Ile-Ife.

How would you describe the NSE's new e-dividend management system and what does it mean for your future operations?

The e-dividend management system facilitates the payment of dividends in an electronic format. Investors can get their dividends faster and hopefully if many people register on the system this will reduce the instances of unclaimed dividends.

What is the strategy behind the NSE's decision to explore joint opportunities with the London Stock Exchange Group to accelerate dual listings?

The London Stock Exchange views itself as an active listing platform for African corporates that are looking to access international funds because London is an international financial center. At the end of 2015, we started implementing our 2015-2019 Strategic Plan and we increased our geographical footprint from Nigeria to Africa. We decided to be a platform not only for the listing of Nigerian corporates, but also for Nigerian corporates operating outside Nigeria around the continent, as well as the many African international corporates operating in Nigeria. In order to do this, we felt it was beneficial to partner with an exchange that is well known and well regarded as an international listing platform. The NSE is the second-largest platform in Africa; therefore, given the linkages that are beginning to emerge on the continent from the African Securities Exchanges Association (ASEA) perspective to the various sub-regional groupings, such as the West African Capital Markets Integration Council, we are positioning ourselves to be a trusted partner of domestic exchanges from an African perspective. In fact, this fungibility has allowed it to weather the forex storm we have seen because people can enter in Lagos and exit in London or vice versa. We have seen liquidity move across both markets based on what is happening in economies.

What role does the NSE play in providing a positive environment for investors and what steps do you take to protect those investors?

We play a role that spans the value chain, from promoting Nigeria as an investment destination to engaging with portfolio managers to talk about the details of the experience, such as how a company actually accesses the market to deploy financing. The NSE ensures the ease of doing business on our platform and that the experience you get is world-class. We do this by making sure we have strong regulations that create a level playing field and a transparent market. We have carried out a number of initiatives in this area to ensure corporates actually live up to their billing because people invest in a company to get positive returns. We have introduced a corporate governance rating system, which is now mandatory for companies on the main board.

What are the advantages for an indigenous company to list on the NSE?

There are many advantages for an indigenous company to list on the NSE, from capital raising through to the less thought about advantages such as branding. If a bank in Nigeria is not listed, people will think there is something wrong. We provide a platform to raise capital; more importantly, when a company lists on the NSE it has a credit rating, which allows it to get other types of financing at better rates. It is viewed as being a transparent and compliant entity because of the rigors of listing and the ongoing duties to report its financials and so forth. Another good reason is to pass control of the company from one generation to another.

What are your expectations for 2017?

We really must institutionalize the fight against corruption in a way that the bureaucracy supports the ease of doing business. In the short term we have trade imbalance issues. We have strong demand for forex and are not getting enough of it. We need to address this by increasing the supply of forex through borrowing forex, selling assets, doing swaps, or a combination of all three.