Oladejo: How we automated Stock Exchange

I was responsible for transforming the manual Call-Over trading floor to an electronic, computer-based platform. It was a big challenge. At that time, everything was hitherto done manually.

Alhaji Rasaki Oladejo FCS, a teacher, an economist, retired civil and public servant, and most importantly a doyen of the famous Nigerian Stock Exchange, is an embodiment of financial wisdom, diligence and visionary ideas. He joined the Nigerian Stock Exchange on the eve of a revolution that transformed the institution into a modern stock exchange and effectively putting it in the vanguard of Nigeria’s current development initiatives. He played collaborative roles in moulding the NSE, to what it is today.

In this exclusive interview with the PEACE Magazine in Lagos, Nigeria, Oladejo, goes memory lane about his indelible landmarks in the history of the stock exchange.

Excerpt.

For those who may not be familiar, please explain the roles of the Chambers of Commerce in the Nigerian economy?
The Chambers of Commerce play crucial roles in the Nigerian economy. As the vanguard of businessmen, they are instrumental in advising the government on improving the business environment, from tariffs and taxes to investments opportunities and canvass for encouraging economic policies for the wellbeing of their members. They are voluntary non-profit organizations of businesses and professionals working together to promote and protect the interest of their members and the broader business community. Their work in reviewing government budgets and making recommendations for the benefit of the organized private sector underscores their strategic roles in economic growth. Chambers of Commerce in Nigeria are under the aegis of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) which is the Umbrella organization for various affiliated Chambers of commerce within Nigeria. It also champions the course of business through its advocacy role and influences public policies that promotes free enterprises for the growth and development of business in Nigeria. It works in synergy with Nigeria Employers’ Consultative Association NECA, an umbrella organization of employers in the organized private sector of Nigeria and the Manufacturers Association of Nigeria.

You have had a distinguished career in the public and private sector which one is the defining moment of your professional journey?
The Nigerian Stock Exchange was the climax of my career. I spent about six years at the Lagos Chamber of Commerce and Industry after I left the Nigeria public service in 1983. During my time at the Chamber, the organization celebrated its centenary anniversary because It was established in 1888. To commemorate the event, the Chamber published a book on its one hundred years of services to the business community and the Nigerian economy. Professor Olukunle Iyanda, who was then Dean, Faculty of Business Administration at the University of Lagos, was the distinguished author of the book. It was a very good publication. I worked with him as the Research Officer. After the publication of the book, I moved to The Nigerian Stock Exchange.

How the Lagos Chambers did received the news of your going to NSE?
The Chamber was not happy that I left. It was a tough one. They were grooming me, possibly with the intention that I may one day become the Director General of the Lagos Chamber of Commerce and Industry (LCCI). But I had made my decision. To be honest, The Lagos Chamber of Commerce changed my life and my perception of things. It broadened my investment horizon. My going to The Nigerian Stock Exchange, was through providence. The then Director-General of the Nigerian Stock Exchange, late Apostle Hayford Alile, OFR, was a member of the LCCI executive Committee and also of its Economics Committee. Unknown to me, he had been observing how I wrote papers and handled assignments closely for a long while, since 1984. It was not until 1989, when a top-level vacancy opened at the Exchange and that I realized he had already considered me suitable for the position.. That was how I ended up at The Nigerian Stock Exchange. My journey from The Lagos Chamber of Commerce and Industry to a collaborative role at the Nigerian Stock Exchange clearly shaped my professional path. It was a truly impactful career!

What position did you hold at the Stock Exchange?
I was appointed Assistant General Manager and Head of the Department of Research and Information Services. I was also made the Chairman of the Trading Floor. That gave me significant visibility because, at that time, we operated a call-over trading system. It was all verbal shouting: ‘Offer! Bid! Offer! Bid!’ Then I would ask, ‘Okay, what are you offering?’ and people would respond, ‘I bid,’ and so on. It was loud and intense. I also wrote many papers and speeches, not just for officials of the stock exchange, but sometimes for Nigerian Government officials whenever they were invited to speak at our events.

You eventually became the Deputy Director-General. What were the major milestones and challenges you faced in that role?
Before I became Deputy DG, I was tasked with a significant project: automating the trading floor of the Nigerian Stock Exchange while my senior at the time, Dr. (Mrs.) Ndi Okereke-Onyiuke, was given the assignment to handle the computerization of the Central Clearing System. I was responsible for transforming the manual Call-Over trading floor to an electronic, computer-based platform. It was a big challenge. At that time, everything was hitherto done manually. The idea was to create a system where trades could be carried out using computers. Apostle Hayford Alile, our Director General then, was a visionary leader, who believed in us and that is what true leadership is about. We travelled to Canada with some of my officers and we underwent special training on how to run an automated trading system. We also obtained technical assistance, experts came in and made recommendations on how to transform the stock exchange into a modern institution. We followed those recommendations, and before Apostle Alile retired in 1999, we had started trading using computers on the transformed trading floor. The Exchange also introduced dematerialization. The idea was that just like you get a receipt or printout from the bank instead of holding physical cash, you should be able to own shares without having a physical certificate. That way, ownership could be verified electronically, which made transactions faster and safer. Dr. (Mrs. Ndi Okereke-Onyiuke, achieved this task together with the computerisation of the Clearing System. We adopted the T+ 5 Clearing system meaning if you buy shares on a Monday, by the next Monday, the shares would be fully registered in your name and you could trade them. That was a huge improvement. Today, trading at the Nigerian Stock Exchange is on T+3 settlement cycle making our Exchange one of the most modern in Africa. Alhamdulillah.

Is the Nigerian Stock Exchange a government-owned body?
The Nigerian Stock Exchange is not a government body. It was set up by private individuals and organizations. The government does not have any role in its establishment and operations. Economic groups like the Nigerian Employers’ Consultative Association, NECA, the Manufacturers Association of Nigeria, (MAN), the Chambers of Commerce and others in the organized private sector established the Nigeria Stock Exchange in 1960 in Lagos. It is now known as The Nigerian Exchange Group. Many be you are probably confusing it with the Securities and Exchange Commission (SEC). The SEC is the government arm of the capital market. It is responsible for surveillance and regulatory control. NSE, is independent of government ownership.

Why unclaimed dividends and is anything being done to address the situation?
The issue is not far-fetched. During the Indigenization Decree period, foreign companies were mandated to sell shares to Nigerians. Some of those who bought shares were government officials and did not want to be known, so they used different names to buy shares.. Over time, some of them died, and the shares and the dividends attached to their names remained unclaimed. Those who did not die have forgotten the names they used to buy the shares and so could not receive dividends accruing. These unclaimed dividends keep multiplying. The SEC) is very active now and reaching out to the public and working with registrars to trace the rightful owners of these investments. They are making a lot of noise on it right now. By law, dividends can be claimed for up to 12 years, it is after that, it becomes statute barred. I think in the future the government will have to make a policy decision on it, which may help the situation. However it is not as bad as being spread, because I am aware, more people are coming forward now to claim their dividends.

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