Compulsory Listing of Key Economic Sectors on the Nigerian Stock Exchange: Issues Arising

Abstract

On February 16th 2012, the Victoria Island office of the law firm of Babalaking & Co. hosted the members’ forum of the Capital Market Solicitors’ Association. The theme of the event was: Re-awakening the Capital Market through Participation of Key Players in the Economy. The forum attended by the Mr. Oscar Onyema the CEO of the Nigerian Stock Exchange, Honorable Herman Hembe the Chairman of the House of Representatives’ Committee on Capital Market & Institutions and representatives of various key players in the Oil & Gas and Telecommunications sectors, served as a sensitization platform and prelude to Hon. Hembe’s intention to sponsor a Bill that will compel key players in the Nigerian Economy to list on the Nigerian Stock Exchange. These sectors are; Telecommunications, Oil & Gas, Power & Energy, Solid Minerals amongst many others.

At first glance, the legislative proposal seems to be in divergence with § 17 of the Nigerian Investment Promotion Council (NIPC) Act CAP N117 LFN 2004 which provides that non-Nigerian investors may own any percentage of equity of their choosing in a Nigerian business, with proponents against such a Bill arguing that such proposal is akin to indirect expropriation and likely to stifle foreign direct investments in Nigeria.

In this article, I analyze whether the overarching aim of Hon. Hembe’s legislative proposal amounts to indirect expropriation or measures having equivalent effect under Nigerian and International Investment Law.