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Eager to achieve zero tolerance against infractions of its rules as a way to boost investors’ confidence in the nation’s capital market, the interim administration of the Nigerian Stock Exchange (NSE) last week got the approval of its council to sanction errant members.

While it already presented a draft of the recommended penalties to market operators, the Exchange said the implementation of the suggested punishments will take effect after a review of all comments and contributions received from operators, latest last Friday. Some of the penalties include issues on unauthorised sale of securities, shares, misappropriation of funds, third party transactions, and maintenance of clients’ accounts.

David Amaechi, an executive member of the Shareholders Association of Nigeria, said the recent move by the NSE “is a great step towards curbing abuses in the market such as insider trading,” common among stockbroking firms.

However, he said, “Regulators must go beyond just creating rules and regulations; they must start enforcing these rules, name names, and bring naughty dealers to book.”

He said investors’ confidence, which is presently at its lowest ebb, can only be gained back in the market “if regulators do their work well.”

The chairman of the Association of Stockbroking Houses of Nigeria, Ola Yussuff, said the current market performance will see more improvement if the NSE does justice to operators involved in different market infractions, adding that “a standard market must be transparent to gain investors’ confidence.”

However, Mr. Yussuff, who is also the chief executive officer of Trust Yield Securities Limited, a stockbroking firm, said market regulators must ensure that dealing members not involved in any sharp practices in the market are treated fairly and encouraged.

“Stockbrokers are not as active as they should be right now because of the several problems in the market. The people that get more indigenous investors to come to the market are the stockbrokers who go about marketing in all the nook and cranny of the country. But they are presently not encouraged,” he said.

Clarity of rules

In the mean time, Arunma Oteh, director general of the Securities and Exchange Commission (SEC), in a statement posted on SEC’s website last Thursday, said the new rules are meant to shape behaviour, set standards, and create a level playing field for participants in the market.

“Our assessment of the (global) crisis revealed that the absence or inadequate rules in some respects contributed to the scale of the crisis in Nigeria,” Ms. Oteh said.

Citing an example, she said the margin trading exposures of banks and brokerage firms was fuelled by the absence of adequate margin trading regulation.

“New rules have been introduced, while some existing ones were amended and others completely expunged to ensure alignment with international best practice,” Ms. Oteh said.

She said some of the new rules were introduced to encourage the emergence of new products, strengthen the protection of customer assets in the market, and improve financial reporting and governance of public companies.

“Some of the rules have emerged from the collaborative efforts of financial sector regulators. An example is the margin trading rules which were developed and have been jointly issued to banks and market operators by the Central Bank and the Commission,” the Exchange Commission’s boss said.

Last month, SEC enacted some new rules and amended some of its old rules and regulations. Some of the new rules include rules on negotiated settlement; conditions to grant waiver on bonds that are not backed by an irrevocable letter of authority; custodial services for registered collective investment schemes; securities lending and borrowing; and Exchange Traded Funds.

The Exchange Commission also said it approved the implementation of a new code of corporate governance for quoted companies, adding that the code will become effective from April 1.

The African Leadership Academy, based in South
Africa, is a world class school committed to grooming a new generation of
leaders that would be catalysts for transformation change on the continent. In
this interview, the founder, Fred Swaniker from Ghana, talks on the challenges
of development in Africa and how the academy is contributing to bring change to
the continent. The interview was conducted via email.

Fred, 34, had the idea of the academy while on
internship in Lagos. Since 2007, the African Leadership Academy has been at the
forefront of changing the fate of the continent by training young Africans who
are passionate about making a difference in the community

What are the criteria for
eligibility and your process for recruitment?

Recruitment begins with a number of Admissions officers working
throughout Africa to advertise ALA and encourage young people between the ages
of 16 and 19 with leadership potential to apply. The preliminary application
form asks them to write essays describing themselves and how they have changed
or influenced their communities. Our dedicated admissions team reads every
application and narrows around 3,000 initial applicants to a shortlist of
roughly 400 finalists.

We then invite these finalists to participate in “finalist
weekends”, which we hold in a variety of countries across the continent. During
these weekends we interview each applicant, test their academic readiness, and
take them through their paces with various group activities that give us a
sense of how they lead in group settings. Finalists then submit several more
essays and letters of recommendation. After this, we select approximately 100
young leaders who are invited to attend the Academy. We are looking for
leadership potential, entrepreneurial spirit, passion for Africa, dedication to
service, and academic potential.

How do you raise funds
for the academy?

We have a number of supporters and sponsors around the world who
contribute to our cause. We firmly believe that financial means (or lack
thereof) should not be a barrier to entering the academy. Our supporters are
both individuals and companies that offer varying levels of support from once
off donations to long term annual commitments or larger project-specific
grants.

We do also have a small contingent of fee-paying students that
covers some of our costs and every student (even those receiving significant
financial support) is expected to make at least a small contribution toward the
cost of the program.

So far, how would you
assess your journey at the ALA?

My journey at the Academy has been a very fulfilling one. Being
one of the founders, I am in the fortunate position of having been present from
the very beginning of the Academy’s development and I have been so thrilled to
watch it grow from strength to strength. It is consistently amazing to me how
something which started as an idea in business school has developed into an
institution that houses some of Africa’s most talented future leaders. I have
enjoyed every new step in the growth of ALA and I look forward to it continuing
to develop the next generation of African leaders.

When will the school
become a fully-fledged secondary school?

At the moment we do not have plans to develop into a
fully-fledged secondary school. ALA is supposed to be a pre-university program
providing the very best education and opportunities to develop Africa’s most
outstanding leaders. One of the things that make the ALA experience so
meaningful is the extraordinary sense of community our young leaders experience
on campus. Smaller numbers allow us to be dedicated to each young leader and to
develop their particular brand of leadership for Africa’s future.

While we have not ruled out expanding our initial two-year
full-time program to say 3 or 4 years, we do not have plans to do so at the
moment. We are however developing systems and an infrastructure to support our
young leaders after they leave our initial 2-year program and go on to
university and beyond.

Are there plans for a
primary school?

At the moment we have no plans to expand the Academy into a
primary school. The idea behind the academy is to source young people who have
shown potential for leadership within their own communities and so if we
recruit at too young an age, candidates would most likely not have had
opportunities to demonstrate the concrete acts of leadership we are looking
for.

What, in your view, is
the most serious issue facing the educational system in Africa?

One of the main problems we have identified is that African
schools often do not teach students about Africa. In a number of countries on
the continent, students are taught much more about European history, the geography
of the Americas, Western literature and very little or nothing about African
history, African geography, African politics and African literature. But how
can we solve our problems if we do not understand our history and our context?

So at ALA, we try to encourage an understanding for Africa as a
continent. We believe that with passion and a good understanding of the
dynamics of Africa, our young leaders will be more effective in bringing about
significant change on the continent. The other issue facing the educational
system in Africa is the “rote” learning that takes place in most schools. This
method encourages students to simply memorize facts as opposed to developing
their ability to think independently and solve problems in a creative manner.

We cannot develop Africa without developing our young people as
innovators, entrepreneurs, and creative thinkers. So at ALA, we adopt a much
more participatory approach to learning, in which students do not simply get
lectures from their teachers, but they are pushed to think for themselves and
to challenge conventional wisdom.

One thing that is
interesting is your concept of ethical leadership in Africa. Can you throw more
light on this?

Ethical leaders are committed to doing what is best for the
people of their country and continent – even if they must make personal
sacrifices to do so – and they have a strong moral compass which allows them to
steer clear of corruption and self-serving behaviour. Ethical leaders put the
needs of their people before their own. Ethical leaders understand the rich
diversity that makes Africa so unique and are willing to co-operate and
collaborate to create a future which is positive for the continent. Ethical
leadership is about doing your best, every day, to institute policies and
systems which uplift the downtrodden and promote equality, diversity and basic
human rights.

Your dream is to groom
6000 young African leaders within the next 50 years. Is this an ambitious
project or do you believe that this number is enough to bring about the kind of
change you desire and which is needed on the continent?

We believe that a critical mass of 6000 leaders will set in
motion a self-reinforcing cycle of transformative change across Africa. These
leaders will implement systems and design policies that will, in turn encourage
the development of more ethical leaders. It is a very ambitious project, and we
are conscious of the enormity of the task. We know that what this Academy seeks
to achieve is daunting in its scale but we firmly believe that we can achieve
our goal: The goal of a peaceful and prosperous Africa.

We have seen effort by
the MO Ibrahim foundation to encourage responsible leadership in Africa and how
nearly improbably this has been. Do you sincerely believe that the problem of
Africa is just leadership or more the absence of strong institutions?

There are many problems facing our continent and there are a
variety of projects we could involve ourselves in, which seek to solve those
problems. While ethical leadership might not be the most visceral or tangible
challenge facing the continent today (in contrast to something like poverty or
HIV/Aids), we believe that leadership is the key to finding the solutions to
all of Africa’s other problems.

If we train leaders in politics, they will help implement the
policies that create work and alleviate poverty and debt. If we create leaders
in health care, they will help solve the problems of infectious diseases like
HIV/AIDS. If we create entrepreneurial leaders, they will build companies that
can create jobs for the millions who are unemployed on the continent. It is
true that the lack of strong institutions is problematic in the African
context; however, we believe that the right leaders will be able to develop new
institutions and redesign ineffective ones. Leadership is a catalyst for
positive change in all segments and sectors of business and society – and it is
for this reason that it is our overriding focus.

Some people believe that
Africa’s problems can only be solved by home grown solutions. To this group,
how would you justify still sending your products to universities outside of
the continent?

I believe that the only way Africa will develop is through the
resourcefulness and ingenuity of its own people. Africa needs African leaders
to create uniquely African solutions to its uniquely African problems. At the
same time, I believe that our young leaders can benefit tremendously from
exposure to institutions, organizations, and networks that are rooted outside
the continent.

Our students are mature enough to benefit from world-class
educational resources in countries such as the United States and Europe without
losing their passion and commitment for the continent, and our curriculum
reinforces this framework. We would love to send more of our students to top
universities around Africa but, unfortunately, the students struggle to get
scholarships and financial aid to these institutions. We have found foreign
institutions – particularly those in the United States – have tremendous
financial resources that enable our young leaders to benefit from outstanding
educational experiences they might not otherwise have access to.

For this reason, while some of our students will continue to
attend outstanding universities in Africa, others may find it more economically
viable to attend universities outside the continent. I also want to emphasize
that our customized approach to leadership development – in combination with
our forgivable loan program – is designed to ensure that our leaders do indeed
return to the continent to leverage the skills and network they built abroad to
drive change across Africa.

It is taken that one of
the biggest problems of the continent today is corruption. How are you looking
at this in ensuring that your products can uphold the highest standards of
integrity?

Our leadership curriculum focuses on the importance of ethical
leadership to the overall success and prosperity of the continent and
highlights the extraordinary damage that is caused by corruption and
mismanagement. These lessons are further reinforced by guest speakers who
inspire our young leaders with stories of achieving extraordinary social impact
in the face of overwhelming institutional corruption. When our students see
tangible examples of how ethical leadership can truly transform countries and
communities, they are motivated to combat the endemic corruption which has
plagued the continent for so long.

I am curious to know why
this academy is not cited in Nigeria, being the most populous country on the
continent. Is there any special attraction in South Africa, or rather, is there
something that makes it difficult for Nigeria to host this academy?

We decided to found the Academy in South Africa because it
serves as the economic and transportation hub of sub-Saharan Africa.
Johannesburg’s highly developed transportation infrastructure – combined with
its highly diverse and truly pan-African population – made it the ideal city in
which to locate our Academy.

I understand that the
students who go through your academy on a scholarship are expected to return
and work in the continent for at least ten years after their studies abroad. Is
this bonding necessary given that this is the era of globalization and your
students should be able to give back to their societies and also humanity no
matter the country they decide to reside?

Our mission is simple: to transform the continent by developing
future generations of African leaders. In our view, the most effective way to
achieve this mission is by ensuring that the young leaders we develop are fully
committed to the continent, and that they are not using ALA as a “ticket out”.

For this reason, we make it very clear to all our applicants
that any scholarship aid they may receive is contingent on living and working
on the continent for a period of 10 years following their 25th birthday. This
policy serves two important purposes: (1) It ensures that those young people
who choose to attend the Academy are genuinely and wholeheartedly committed to
Africa and its development; and (2) it ensures that the 6,000 leaders we are
developing and supporting will be located in Africa, where they are best
positioned to devise innovative solutions to the continent’s most pressing
social and economic challenges. While we acknowledge that those living outside
the continent can contribute to its empowerment, we believe those living on the
continent can effect change in a more compelling and impactful fashion.

So would you like us to
believe that you are doing this as a service, but I am curious, is this venture
profitable? Do you make lots of money? How much?

ALA is a non-profit organisation. All the money we raise goes
towards providing scholarships for our students and covering the operating
costs of the Academy. Employees, including myself, receive salaries, but most
of us could earn far more if we were to work in the corporate sector. We are
doing this because of our passion for Africa and desire to see it prosper.

Are we likely to see ALA
set up in other countries?

At this point, we are focused on fully institutionalizing the
Academy in South Africa, and we do not have immediate plans to open other
branches in other countries.

Cell phones have become such a major part of our existence and for most people, our telephone bills have become a large monthly expense.

Have you ever returned from abroad to find a shocking mobile phone bill awaiting you? When you use your phone abroad, as soon as it is detected on a roaming partners network, expensive international roaming rates and charges kick in.

Roaming costs have tarnished the wonderful memories of many vacations, but fortunately, there are practical steps you can take to stay in control of your phone bill and still stay connected with family, friends, and business associates.

Know before you go

Do you know what you are being charged for? Before you leave your country, ask your service provider about roaming fees for both phone and data use so that you have at least a rough idea of the cost of using your phone abroad.

When travelling internationally, you are typically charged both for receiving as well as making calls, for sending text messages, accessing e-mails, voice mail messages, surfing the web, and downloading videos, music, and images in the countries you are visiting.

What services do you really need?

Do you need to be able to make and receive calls? Do you need real time Internet access, or other data services on your device? Do you really need to check your e-mail instantly? This will determine how you should use your device on your trip.

Send and receive text messages

It is free to receive texts abroad, but there are significant charges to receive calls, so if you are having regular conversations with people in Nigeria, try to encourage them to make your interaction text based.

Use Skype

By using a web-based phone service, you can keep your bills down. Service providers such as Google and Skype, offer free calling at relatively low rates on international calls.

If you are travelling with your laptop, you can use Skype at any wireless hotspot or from your hotel room.

Be careful of your voice mail

Even if you are careful with your mobile phone use and avoid making unnecessary calls, do you know that if someone leaves a message on your voicemail, you are billed as though you were receiving an international call? Even worse, you will be charged again to listen to those messages.

Buy a local SIM card

Buying a local SIM card can be the cheapest way of using your mobile abroad, particularly if you plan to spend an extended period in the same country. Replace the SIM card in your phone or buy a cheap GSM-enabled phone as an alternate phone.

Switch data roaming off

The new-generation smart phones such as the iPhone and the Blackberry have become hugely popular devices providing access to your emails and the Internet, a world of shopping, and social networking applications just a touch away. We thus unwittingly leave ourselves open to international roaming charges on our smart phones as soon as we switch them on.

The continuous activity utilizes data bandwidth and this leads to constant charging and huge bills in accidental roaming fees. If you do not need data services on your trip and can’t resist the temptation to sneak a quick e-mail check on your smart phone, then turn off the data service when you are roaming.

The good thing about smart phones is there are options and you can choose which services to cut off. After disabling data services, you will still be able to make and receive calls and text messages. In addition, you can turn this feature on and off at will so you can still check your emails periodically.

Use wi-fi

If you will have access to wi-fi hotspots, business centres, or Internet cafes at your destination, you won’t have to use your mobile phone all the time and can use your laptop.

However, be cautious and only connect to wi-fi hotspots that you feel you can trust. Use ‘free’ hotspots with extreme caution; they may be convenient but are not always safe as there is always a danger of hacking or snooping.

To at least reduce your vulnerability, use strong passwords and install some security software. Wi-fi access, whilst it may not be free, is usually much cheaper than paying data roaming costs.

As a mobile phone user, you must take some responsibility for staying informed of the cost of services that you subscribe to.

It is also important that mobile phone operators are more proactive about providing cost information for users rather than for subscribers having to stumble on information after a bad experience. Much of the information on the service provider websites is confusing and not that easy to understand.

Clearly, what subscribers want, need, and deserve is more transparency, so that they can confidently use data services when roaming, as well as some sort of control mechanism to ensure they do not incur excessively large bills when roaming and without even realising it.

Write to personalfinance@234next.com with your questions and comments. We would love to hear from you. All letters will be considered for publication, and if selected, may be edited.