Expert harps on rate convergence to attract FDIs

SEC’s e-dividends scheme records only 2.1 million investors
To make the nation’s foreign exchange (forex) market attractive for Foreign Direct Investments (FDIs) in 2018, the Central Bank of Nigeria (CBN) must do all within its powers to ensure rates’ harmonisation.This will mean closing the huge gap between the official exchange rate of N306/$ and the parallel market rate of N360/$, as it is a disincentive to genuine investors, particularly the foreign investors.

This was the position of the former Managing Director of Unity Bank of Nigeria Plc, Mallam Rislanudeen Muhammad, while reviewing Nigeria’s forex market in the out-gone year.He also declared that the exchange rate gap has continued to act as an incentive to round tripping for the banks and a few privileged Nigerians at the detriment of the Economy.

Muhammad also advised on how to maintain the stability in future, even in the event of oil price shock at the international market.“Foreign exchange market experienced relative stability over most part of 2017 due largely to improved price of oil and enhanced capacity of CBN to deal with legitimate demands, thereby reducing tremendously the incidence of round tripping and arbitrage.

“It has also supported reduced inflation, improved GDP growth rate as well as exit from recession. “However, there is still a wide gap between official and black market rates and so long as that exists, round tripping will be incentivised.

“Getting into 2018, CBN should leverage on our improved foreign exchange reserves to close the two markets. That will no doubt improve confidence to private sector, especially foreign portfolio and direct investors, as well as Diaspora funds,” he said.

Meanwhile, the Securities and Exchange Commission (SEC) has announced the end of the free registration for e-divided enrollment by shareholders, saying it has registered only 2.1 million investors into its e- dividends project that took off last year.

The Acting Director-General of SEC, Dr. Abdul Zubair, who disclosed this in Abuja at press briefing, said the exercise gulped N315 million.According to him all investors/shareholders that are yet to enroll for the e-dividend have been enjoined to continue with the registration exercise, but now at a cost of N150 per investment. 

The N150 fee, he said, will not be demanded from investors at the point of registration and/or submission of completed e-Dividend Mandate Forms, but after it has been confirmed that the account supplied by the investor is adequately funded and operational.Such investors, he said, “should continue to approach their banks or registrars, as usual, to seamlessly mandate their Bank Accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue; as the N150 would not be demanded from them at the point of registration.”

As a result of the decision to continue with the e-dividend registration exercise, Zubair also announced the extension of Forbearance for Multiple Accounts Consolidation (FMAC).The decision to extend the FMAC, he said, was taken “with a view to encourage many more investors to consolidate their multiple subscriptions into one account, until March 31, 2018.

Accordingly, “investors that bought shares of the same company during public offers, using different names, are allowed till March 31, 2018, to continue to approach their stockbrokers or registrars, to regularise their shareholdings, in line with SEC Rules on customer identification.”

However, all shares not regularised within the stipulated time frame, he said, “will be transferred, on trust, to the Capital Market Development Fund.”
He said “all registrars have been directed to stop the issuance of dividend paper warrants with effect from January 1, 2018,” in line with approved rules of the Commission.”On the other hand, he noted that all paper dividend warrants issued up till December 31, 2017, are valid and should be honoured by banks and registrars.