7 May 2018

Nigeria: Stakeholders Bemoan Stifling Effect of Insecurity On Nigeria's Stock Market

Investors in Nigeria's capital market at the weekend expressed displeasure over the insecurity, social disorder, and incessant killings perpetrated by Fulani herdsmen and other political thuggery, calling for a new strategic policy to stem the tide.

Already, the investors linked the current instability in the market to security challenges bedevilling the nation, which they claimed had aggravated apathy in investment, especially on the part of foreign investors.

Some of them, who spoke with The Guardian, cited the recent invasion of the National Assembly, where some suspected thugs made away with the Senate's Mace, disrupting the lawmakers' plenary session, the invasion of a church in Benue state and killing of two Catholic priests, and a host of many others.

They suggested that the Federal Government should declare the group terrorists, and seek assistance of foreign experts to combat these criminal acts currently retarding the growth of the nation's economy.

Specifically, the Managing Director, Highcap Securities Limited, Imafidon Adonri, in an interview with The Guardian, argued that war, insecurity and social disorder are disincentive to investment, noting that no investor would stake his fund in a country where his investment cannot be protected.

"War, insecurity, and social disorder are strong factors that determine a country's risk an investor will consider before investing. Nigeria is currently experiencing these malaises. They must be tackled with seriousness for investors' confidence to increase."

Similarly, the Managing Director, Crane Securities Limited, Mike Ezeh, disclosed that foreign investors are already selling off their shares due to the uncertainty and fear that surround Nigeria's political space.

He said: "Our political leaders are toying with a lot of things. By the time we sit down and take stock of the effect of all these killings, then we will know what we have done to our national psyche.

Looking at it from the foreign investors perspective, it' is only the daring ones that come at this time of uncertainty and fear.

"You keep your treasure where your heart is. Locally there is apathy towards the market. People are scared of investing. They have even resorted to selling for fear of the unknown. Federal Government should stop the killings; they are the only ones that have the capacity do so." he added.

The President, Proactive Shareholders Association of Nigeria, Taiwo Oderinde, on his part noted that the level of security in a particular jurisdiction is a major factor that attracts or lures foreign investors to the market before the issue of return on investment is considered.

"The insecurity caused by the incessant killing by Fulani herdsmen, is indirectly affecting our capital market in many ways. One, Foreign Direct Investment (FDI) has reduced significantly because security is the number one variable that lures foreign investors before we talk of Returns on Investment (ROI).

"Our entire capital market is automatically affected. The solution is that government must declare this group terrorist group, and seek foreign assistance to fight them based on their expertise and experience."

The Publicity Secretary, Independence Shareholders Association of Nigeria, Moses Igbrude, said the issue of insecurity and chaos is a major impediment to the ease of doing business anywhere in the world.

"When manufacturers will produce and find it difficult to market their goods, how would listed companies do well? Banks have closed most of their branches in some of these regions where these killing are persistence. Beverage and confectionery companies are the most affected by the insecurity and killing.

"The stock inventories of these firms are high due to inability to sell their manufactured goods, because they cannot deploy their staff to these areas that are prone to attack. This affects the companies' turnover as well bottom line.

I am appealing to the government to rise to the expectation and tackle this menace to grow the economy."

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