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Boosting Nigeria’s Capital Market Competitiveness

Boosting Nigeria’s Capital Market Competitiveness

Goddy Egene writes that the outcome of the 23rd annual conference of the Chartered Institute of Stockbrokers will boost the competitiveness of the nation’s capital market if implemented

The capital market facilitates the movement of funds from surplus end to the deficit side. In other words, the market facilitates to transfer of capital from those who have it but do not need it at the moment, to those who do not have but need it, which is called capital formation.
Although the Nigerian capital market has been playing this role over the years, its potential is yet to be fully tapped.

While the market has in the past produced one of the top best returns on investments in the past, it has been performing poorly in the past two years. It declined by 17.8 per cent in 2018 and has so far depreciated by over 13 per cent. Whereas market fundamentals are attractive, macro-economic challenges have had their negative impact on the performance. This has affected its competitiveness


In order to make the market attract more patronage and enable it play its role of capital formation adequately, the Chartered Institute of Stockbrokers (CIS) last week discussed ways to make this happen at its annual conference.
The theme of the conference was: “Boosting capital market competitiveness in a challenging macro environment.”

Welcoming stakeholders comprising operators, regulators, government officials and law makers among others, President of CIS, Mr. Dapo Adekoje, said theme of the conference was carefully selected to challenge their intellects in coming up with practical ideas that would trigger a quantum leap in the performance of the Nigerian economy.

According to him, the institute in collaboration with other stakeholders was working out and executing various strategic actions to bring stability to our capital market, improve the national economy, and ultimately make the business more rewarding.

“The CIS operates organic layers of corporate governance structure. At the apex is the Board of Fellows which comprises the past presidents, followed by the governing council, and then the management. All these groups mentioned have been very busy working out and executing various strategic actions to bring stability to our capital market, improve the national economy, and ultimately make the business more rewarding for our members,” he said.

The CIS boss explained that contrary to the wrong impression that stockbrokers are only stock traders, stockbrokers worldwide are trained and recognised as the primary and most reliable experts in all areas of securities and investment business. “CIS members today are practicing in the United States of America, in Europe, and, within Nigeria, in diverse sectors like government, banking, oil & gas and in the academics, just to mention a few. Of course, the stock exchange platform remains our forte and will always be,” he said.

Adekoje disclosed that CIS is recognised by their counterparts worldwide, noting that working agreements with the Chartered Institute for Securities & Investment, United Kingdom and the Association of Certified International Investment Analysts (ACIIA) ensure that their members can practice in 35 countries in the world.

Lawmakers’ support
One of the factors that have affected the poor performance of the market is some legislations and policies that have inhibited flow into the market. But going by the outcome of the conference, there is ray of hope as law makers who were presented pledged their support for the development of the market.

For instance, the Chairman, House of Representatives Capital Market and Institutions Committee, Hon. Babangida Ibrahim, said the legislators were willing to enact laws that would boost operations in the market.
According to him, low investors’ confidence as well as unclaimed dividends remain the major issues affecting the growth and development of the capital market.

“I want to assure you that the committee is ready to work with the CIS. The National Assembly and House of Reps in particular, is aware of the major challenges facing the capital market in recent times. As a result of that, we have already started engaging with some of the key stakeholders including the Institute on the best way forward. I would like to appeal to the Institute to be unofficial advisers to the government and continue to monitor the activities of the government as regards policies affecting the market so as to ensure we move the capital market forward,” he said.

Speaking in the same vein, the Vice Chairman, Senate Committee on Capital Market, Senator Binos Yaroe, charged the Institute to come up with policy proposals that will enhance the competitiveness of the market.

“The challenges the Nigerian capital market is facing cannot be emphasized and the economy has never been as bad as it is today and it is a known fact that the capital market is the barometer of any economy. In that regard, the National Assembly is ready to partner and support the institute to ensure that our market is more competitive,” Yaroe, who is also a stockbroker said.

On his part, the Minister of Industry, Trade and Investment, Otunba Niyi Adebayo said once CIS comes up with policy proposals to support and address Nigeria’s infrastructure challenges, the federal government would incentivize and provide the enabling environment to support this objective.

“We declare our willingness to partner the CIS in ensuring the necessary enabling environment that will further stimulate and boost competitiveness in the capital market as well as ensure a coordinated and integrated approach to Nigeria’s financial sector is attainable. The best way to improve competitiveness is through a mixture of policies designed to help, improve capital market competitiveness,” Adebayo said.

Getting, retaining right talents
A very pertinent reason clients patronise a business is the presence of quality talents that render quality services. This is why the issue of getting and retaining the right talents in the nation’s capital market was discussed at the conference.

The Group Managing Director of Meristem Securities Limited, Mr. Wole Abegunde, who is also a stockbroker, made a detailed presentation on how to boost talents in the market.
According to him, a talent is an employee who meets performance expectations at his/her current job as well as, demonstrates the potential to perform at the next level to drive organizational/business growth.

He said attracting talented individuals is critical to an business success especially in the digital age.
“It is no longer business as usual when it comes to finding and retaining the right talent. The identification, attraction, development and retention of individuals who are of particular value to the industry is key. This is in view of their high potential for the future of the Industry. Every business wants to keep great talents to stay ahead of competition,” Abegunde said.

Speaking on the qualities of great talents, he said they include: intellectually smart; reliable; trustworthy; royal to the brand;committed to the organisation’s vision; versatile as a result of their high potential and one who has the potential to attain leadership position the industry.

“In summary, talents are the 20 per cent who contribute 80 per cent to the business. Other employees have their place, but organisations must do their best to retain great talents,” he said.
Justifying the need to attract talents, he said great talents are scarce (educational system) and in high demand.

“Competition is higher for skills that are required across various industries, such as accountants, Human Resources, hence they are highly mobile. Talents bring onboard innovative ideas that differentiates a company from competition. Talents have choices as competition has become global as a result of brain drain. Countries like Canada, Australia, New Zealand source skills from Sub-Saharan Africa,” Abegunde said.

In as much as attracting talents is a major factor that can boost the competitiveness of the market, he said the way they conduct their selves as individual stockbrokers and organisations determines the brand of the industry and either attract or repel talents.
“If we conduct our business with prestige, respect and candor it will naturally attract talents. Organisations must endeavor to offer good emoluments and condition of service.The ambience of our offices cannot be discountenanced,” he said.

Considering the challenging environment, very few young talents may be eyiung the market at present. But Abegunde gave some tips on how to attract them to the market.
According to him, investment and capital market should be part of educational curriculum from primary to tertiary institutions. He also noted that CIS must look at offering scholarships and also organise national investment competitions in educational institutions.

He cited talent attraction strategies to include: building talents from within the organisation through graduate trainee programme; head hunting (lateral hires); using third party recruitment firms; employee referrals and incentives and social media.

He explained that while attracting talents is the beginning, retaining those talents is a major task.
“The ability of an industry/organisation to retain great talents starts from the recruitment process hence, it is important that organisations get it right by building an prestigious and attractive industry/employer brand that piques the interest of talents to want to work in the securities industry. Organisations must use the right tools in the selection process.

This would include: psychometric testing, ability tests, interviews, assessment centres etcetera;assessing both technical knowledge and behavioral competencies during the recruitment process; ensuring that potential hires are culture fit and their personal values align with the industry values; communicating your employee value proposition. That is, what is in it for the talent through your website and on your social media channels; training hiring managers on how to identify talents; creating a great experience for potential talents all through the recruitment process,” he said.

Abegunde said there are specific skillsets in tehe securities market which include: portfolio managers; stockbrokers; investment advisors; financial advisors;research analysts; insurance companies; pension fund administrators(PFAs); asset management companies; private equity companies and consulting firms.
“In the digital age, skills are transferable. Example, a stockbroker in a stockbroking firm can use his/her skill set in a PFA. When thinking about a career change, people always leverage their transferable/portable skills,” he said.

The stockbroker said having attracted the right talent to the industry, there is the need to understand the workplace generation for effective retention of such talents.
“There are five generations in the workplace of today. Managing across these generations and striking a balance poses a challenge in the modern workplace.

Surprisingly, this one pain point affects a multitude of dimensions within an organisation. Such as the company’s effectiveness, recruitment, retention, turnover, and compensation just to name a few. Each generation has distinct personalities and individuals within each generation share a significant number of attributes.It is important to understand each generation in the workplace so as to leverage on what appeals to them in order to build an effective retention strategy,” he said.

Giving some strategies to retain talents across all generations, Abegunde said there should be an attractive employer brand, structured organization; employee appreciation programs.
“Create trust so that employees become true brand ambassadors. Work life balance, flexi-work opportunity especially for digital natives. Communicate clear career path and growth opportunities, assign mentors & coaches to young employee and for baby boomers reverse mentoring. Create a fun and engaging work environment. Such as TGIF moments, music, nap rooms, collaborative work culture. Effective performance management system that in

corporates setting SMART goals, regular performance feedback and transparent appraisal process. Communicate and deliver on your employee value proposition not only to prospective applicant also to current employees. Provide opportunities for training and development.Career development through job rotation & redeployment opportunities. Strengthen manager/employee relationship,good reward & recognition schemes,” he said.
The stockbroker said talent management programmes help organisations to identify and retain staff with high performance and potential.

“These programmes help to accelerate the development of these set of people. Incentives/reward programs are developed to ensure their retention. The talents become potential successors in the organisation’s succession plan and they feel a sense of belonging and commitment to the organisation. Other privileges and incentives can be designed to constantly engage these set of people so that they remain in the organisation. Additional pay over and above all, off-shore trainings, special assignments, signatory to company accounts, culture & brand champions, mentors & coaches to other staff within the company, buddies to new hires. The talent management program must be attractive to non-talents to aspire to become a part of the talent pool,” he added.

Abegunde stressed that the world is now a global village and people generally want to live in countries where systems work.
“What we can do is to ensure we maximize the value that talents bring in their stay in the organisation and create a conducive environment and experience that helps us harness their full potential for the overall growth of all stakeholders,” he stated.