SEC has done well, but…

when its subvention from the government was withheld on the orders of the National Assembly, should elicit commendation. Few government-owned business outfits have been known to pay their ways before now. The SEC example illustrates that when circumstances warrant, revenue generating agencies could run on their own steam. But, however much SEC’s new revenue drive […]

when its subvention from the government was withheld on the orders of the National Assembly, should elicit commendation. Few government-owned business outfits have been known to pay their ways before now. The SEC example illustrates that when circumstances warrant, revenue generating agencies could run on their own steam. But, however much SEC’s new revenue drive is encouraging, proceeding as it has done to spend the funds generated without due authorisation is regrettable. It may be an illegality that should be punished in order to ensure that probity and accountability in government business are enforced.
It should be recalled that in 2012 bitter recriminations between the National Assembly and SEC Director General Ms Arunma Otteh culminated into a call by the legislators for her removal from office. And when President Goodluck Jonathan ignored the request, the National Assembly, in retaliation, froze SEC’s 2013 budgetary allocation. It must be said that based on the facts on the ground it was wrong for the National Assembly to have taken that decision because the act was capable of grounding the commission’s operations. Had that happened, it would have  affected adversely the performance of the capital market which has just started growing out of its crisis of 2008, when shares of companies listed on it fell precipitously because of low confidence from investors, which in return resulted in workers being laid off, as witnessed particularly in the financial sector. By withholding SEC’s subvention, members showed that they could not be bothered by whatever becomes of the circumstances of a body of such critical importance to the economy.
Having said this, however, Ms Otteh on her part and her management team overstepped their brief when they proceeded to appropriate the funds that accrued from the SEC’s business activities, in defiance of the National Assembly’s instructions. It is worth noting that Ms Otteh’s tenure at the SEC has been embroiled in controversy. Apart from issues of probity and transparency that have dogged her at the commission, a lot also has to do with her alleged irascible attitude that saw senior officials of the commission testifying at variance with her.
Agreed that Ms Otteh has done well for being able to nurse the SEC and the stock market it superintends from its weak state when she took over to its current resurgent state where, according to accounts, capitalisation is improving significantly. However, such ability to get results imposes a responsibility on her to work within the limits set by the rules and regulations guiding the operations of SEC and the constitution of Nigeria.
There seems to be a contradiction between what SEC may have relied on to spend its own revenue without recourse to appropriation. Section 20 of the Investment and Securities Act 2007 does give the commission the power to apply the proceeds of its fund to, among other things, meet the cost of administration of the commission and pay the salaries, fees or other remuneration or allowances, pensions and gratuities to its employees. This section of the Act appears to be in contradiction to Section 80 (3) of the 1999 Constitution which says that no money shall be withdrawn from any public fund of the federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those monies has been authorised by an Act of the National Assembly.
The question which arises now is how to deal with this specific case and also what happened to all the billions of naira that have been accruing to SEC from all the transactions of the stock market? Were all those amounts similarly spent without legal appropriation? The SEC saga also raises fundamental questions about scores of government agencies that are collecting revenues which never get declared or appropriated. It is certainly something that the National Assembly, especially the Public Accounts Committee, should look at more closely in order to promote accountability and transparency in the public sector.