beyondbrics

The struggle to control the Nigerian Stock Exchange has reached the highest echelons of power. The jostling potentates are not among the 900 applicants for the vacant chief executive’s job, but they are certainly taking a keen interest in a race that will shape the future of sub-Saharan Africa’s second-biggest bourse.

The post was recently advertised for the first time in the exchange’s 50-year history and the choice of new boss will go a long way to determining whether Nigeria can break with the market abuses of the past – and join the ranks of major emerging investment destinations.

The final manoeuvres before the late-night ousting of Ndi Okereke-Onyiuke from the bourse earlier this month involved Goodluck Jonathan, the president, and Nigeria’s two richest men – industrialist Aliko Dangote and fuel trader Femi Otedola.

The feud between the billionaires – both major shareholders at some of the exchange’s biggest listed companies – is only one of the tussles among the market’s big beasts.

All of them will hope to be in pole position once the exchange embarks on plans to de-mutualise and float part of itself – a potentially highly lucrative exercise which would allow investors to join broker members in owning chunks of the bourse.

Ms Okereke-Onyiuke – who, after a decade at the helm of the NSE, regarded it as “her personal fiefdom”, according to one insider’s widely shared view – has denied the allegations of financial mismanagement which the Securities and Exchange Commission used to remove her. The regulator has sent KPMG into the exchange, now under interim management, to conduct a “forensic audit”.

The selection of the new exchange boss is being managed by the local arm of Accenture. The candidates are likely to face an independent panel, who will whittle them down to three names to be vetted by the regulator and then the stock exchange’s council (or what remains of it, after some members were suspended).

The most pressing reason to move against Ms Okereke-Onyiuke before her retirement in December was to prevent her controlling the selection of her successor, insiders say.

While few expect her legal challenges to the SEC’s actions to see her reinstated, market players are loathe to discount such a politically connected figure. She is likely to have allies in the frame.

Until she was forced out, Ms Okereke-Onyiuke faced a fairly united front of heavyweight opponents. But they were primarily united, as two market insiders put it, because they made their enemy’s enemy their friend.

Now they appear to be jostling among themselves.

Mr Dangote, who led the charge against the ousted NSE chief, appears well set.

Since he listed some arms of his commodity empire earlier this decade, Mr Dangote has risen to be president of its governing council, which acts like a board.

He too has been suspended pending a resolution to a legal challenge to his election. But some speculate that an ally – perhaps someone like Godwin Obaseki, the broker who handled the Dangote group listings – could be in the running for the NSE job.

Another frontrunner mentioned in financial circles is Yvonne Fasinro, currently JPMorgan Chase’s country head in Nigeria. She appears to be the choice of the groups of financiers and lawyers who were most vociferously opposed to Ms Okereke-Onyiuke.

Caught in the middle is Arunma Oteh. Since she took over at the SEC earlier this year, she has tightened hitherto inadequate oversight – to the point where her critics accuse her of trying to run the exchange rather than just regulating it.

Her move against Ms Okereke-Onyiuke was a bold step. Her next task is to ensure that the succession at the NSE adds to the momentum for reform rather than diverting it into showdown between Nigeria’s big men and women.

Related reading:
Nigeria plans to take bourse public, FT
Nigeria faces test in listing prized asset, FT
Brokers resist Nigerian watchdog, FT