AMCON says any disclosure may negatively affect the stock market.
The federal Government has come under heavy criticism by civil society groups over its decision to keep secret the (planned) beneficiaries of a N22 billion grant it gave to selected stock broking firms across Nigeria.
The Federal Government, through the Asset Management Company of Nigeria, AMCON, decided to give N22 billion forbearance package to 84 of Nigeria’s 200 stockbrokers.
The Minister of Finance, Ngozi Okonjo-Iweala, announced the forbearance package on December 3, 2012. The Finance Minister has since said that the implementation of the package was being handled by AMCON.
AMCON, which is to disburse the largesse to the beneficiaries said although it has sent out letters to the respective brokers and is liaising with them, it does not plan to publish the list of the beneficiaries as it may impact negatively on the nation’s gradually recovering Stock Exchange.
“The stock market has bounced back and is doing well. It is one of the top Exchanges in the world. There would be no need to publish this list or do anything that would have a negative effect on the market,” said Head, Corporate Communications, AMCON, Kayode Lambo.”We are liaising with the stockbrokers concerned with this. There were some conditions to be met. Some accepted and some did not.”
Mr. Lambo said the money would not be given in cash to the stock brokers, but would be used to help them offset their debt to AMCON.
However, some civil groups say the government is obligated to make the beneficiaries of these funds known to the public, adding that it is an infringement on the freedom of information on the part of the media, which is obligated to make information available to the public.
Soji Apampa, a co-founder of the Integrity Organisation, said there is a general principle that the use of public funds be made known to the public.
“People have a right to know about it,” Mr. Apampa said. “Even if the funds are to be used for security reasons- the government may realise that it might not be able to divulge such information at a particular time, maybe for the sake of national security or for some other strategic reasons- the government has to give such information, if not at that time, then later.”
“I do not know the basis of their refusal to share with the public, the beneficiaries of this forbearance package,” he added.
Lanre Suraju, Group Chairman, Civil Society Network Against Corruption, CSNAC, said AMCON cannot justify its decision.
“Except there are some ulterior motives in the selection process, it is unethical for the government not to reveal the beneficiaries. They have a moral and legal/constitutional obligation to do so,” Mr. Suraju said.
“That package is huge and unless there is a law that states that they should not, there is no justification for a public office holder to withhold such information from the public,” he added.
The Ministry of Finance gave two measures to ease the burden of the financial crisis some stock brokers had, after a combination of factors led to the collapse of the nation’s stock market a few years ago.
The first measure was a forbearance of about N22.6 billion on the margin loans of 84 stock brokers, in accordance with Section 6(5) of the AMCON Act. The second measure was the elimination of stamp duties and VAT on stock market transaction fees.
Femi Adeoya, Executive Director, Centre for Patriotic Leadership Initiative, CPLI, a non-partisan, non-governmental leadership and advocacy group, which also runs the Patriotic Forum on social media, said the basic attributes of leadership, which is to be incorruptible, transparent, exhibit equity and fair play are all lacking in the nation’s government.
According to him, it is a genetic characteristic of the government to begin to create avenues to allocate funds on projects that might never be executed whenever elections are approaching, thereby wasting national resources and tax-payers’ funds.
“This is sheer lack of transparency. It is unacceptable and we cannot continue this way. If we continue like this, something will give way soon. Either the government or AMCON would have to make the beneficiaries known to the public. The list would have to be declared, and not only that, the basis and criteria for the selection process and the manner in which the process will be executed” he added.
According to Mr. Adeoya, one of the greatest problems of the nation is lack of a coherent followership, which is always ready to excuse any decision of the government.
“We have to rise up and demand for transparency. The issue goes beyond the beneficiaries of this forbearance package. Without transparency and accountability, there would be no progress”, he said.
Nigeria’s capital market suffered a huge set back a few years ago. The NSE All Share Index, ASI, plummeted from a peak of about 66,000 points in March 2008 to less than 22,000 points by January 2009, wiping out over N8 trillion (or around 70 per cent) of the total capitalization of the stock exchange within this period.
Some Nigerian stockbrokers were indicted of manipulating the stock market alongside some banks, thereby contributing to the crisis.