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Shareholders under the aegis of the Independent Shareholders Association of Nigeria (ISAN) have said the agreement by the banks to contribute 0.5 per cent of their total assets and another 0.5 per cent of 33 per cent of their off balance sheet items to a sinking fund of the Asset Management Corporation of Nigeria (AMCON) is impacting negatively on the returns to shareholders in the country.
The sinking fund is meant to assist AMCON to meet its goals and also ensure that government will not bear the cost of financial crisis in future. Apart from the banks, the Central Bank of Nigeria (CBN) will also contribute N50 billion to the sinking fund.
But in a communiqué issued at the end of their November meeting, the ISAN members said the continuous payment of the money to AMCON is “robbing shareholders value of returns on investments and discouraging portfolio investments.”
The shareholders added that the directive by the CBN that eight banks should recapitalise was in bad taste, saying it is a calculated attempt to rubbish Nigerian banks and the economy.
However, the shareholders said they are in support of the full removal of subsidy from petroleum products, provided the federal government evolves a transparent policy to manage the funds that would be saved from the subsidy removal and invest them in agriculture and infrastructure development.
“Long-term conscious investment in agriculture and agro-products would expand the nation’ employment window, stimulate manufacturing and reduce food import receipts,” ISAN said.
The shareholders alleged that local investors are being alienated in the on-going transformation of the Nigerian capital market, saying successful economies thrive on inclusive or internal development.
They therefore, called on the government to create an investment level playing field, arguing that the current emphasis on foreign retail investors to the detriment of local retail investors’ amounts to economic neo-colonisation.
ISAN equally called for the overhaul of the current national interest regime, total elimination of commission on transaction and the liberalisation of government funds deposits.
“The restriction of government funds deposit to the CBN will stagnate development, deprive the economy of the needed liquidity and engender domestic confidence crisis in government and governance,” the shareholders said.