5 Unanswered Questions: An Open letter to Dr. Abraham Nwankwo Director-General  Debt Management Office

– By Dr. Kazeem Bello (Private Equity and Wealth Management Executive) New Jersey/New York, USA

Dear Dr. Nwankwo,

Please accept our congratulations for successfully steering the boat of the DMO for the period of in-service to the nation. My attention is drawn to your short but loaded response to several boil ups from the Diasporans. It is surely not unexpected and as a former Diasporan, you will understand the frustration being exhibited by the Diasporans on the whole issue of this Bond.

I have shared my professional knowledge over this issue to some Nigerian Fora in recent past. Most of us in Diaspora does not know the process and the technicalities that goes into to establishing these market financial instruments including stock, bonds, mutual funds etc. We are not expected to all be financial gurus in this perspective. I have carefully conducted my research and i have given some advises as far my knowledge can take me on  why the DMO carried out the offer and sales of the first “Diaspora Bond” the way it was exercised. There is a limit to the amount of information I can share due to compliance issues as a professional licensee. But I personally want to believe that, while some of us are advocating a mid-ground solution to enable us move forward since the DMO in all logical perspective has not violated any law or regulation in its marketing and sales( auctioning) of this Bond, I would like to insist that your honorable office with due respect with the mandate from the FGN owes the diaspora and Nigerians in generally an explanation of what actually happened and why it happened that way.

Again, believe me, some of us professionals in this field already know precisely what may have happened and how the market structure works, but what is our percentage compared to the large group of Nigerians in diaspora and at home who would definitely want to believe there is a major foul play and dishonesty in the handling of this  Bond issue. This is very important for DMO and the FGN to come clean to enable them earn the trust and respect of its citizens.

As a guide, without revealing information relating to regulations and compliance, we would want to ask your honorable DG to provide us with more explanation to clear up the issue. Yes I personally noted that you mention that a new product has been developed to address the Diaspora participation in nation building, but when you visited New York in 2013 on a Road Show for the initial $100 Million Diaspora Bond, we had a very cordial and informative session and you expressed the challenges in securing the US SEC approval at time for the Bond which we generally believe will be offered to allow Nigerians participate in the issue. Then the understanding is that every Nigeria diasporan will have the opportunity to participate if they are interested.

Dear Sir, here are some salient details we would like the DMO to provide more explanation on, in the manner in which the DMO handled this offer.

  1. When did the DMO or its agents submitted the Offer for registration with the US SEC and when was it approved for registration. We have information indicating that the US SEC has actually approved this offer since February/ March, 2017.
  2. Sir , at what point in time was it clear to the DMO that this perceived initial Diaspora Bond developed will not pass the registration litmus text in US and UK for a foreign Bond and this necessitated that  strategy must be  changed from  the initial “open-end”  Concept into a “Conventional Bond” which by structure is limited in nature as far as marketing and attracting investors are concerned. The DMO opted to proceed with the Bond knowing fully well that the Co-Managers will always stair and for cost effectiveness, opted for  the sales and marketing in a close-in conventional marketing to private investors that will obviously exclude the vast majority of Nigerians. Why did DMO not be upfront to inform Nigerians and explain its constraints in this regard and at this point in time. With due respect sir, I am not saying the DMO has violated any known rules since i have nothing to suggest that position but why is the DMO not inform the Disaporans  that there is a  game change ?
  3. Based on the market structure, Bonds and other similar instruments are registered and issued daily, why did DMO proceeded to retain the name “Diaspora Bond” when it was already known that the target majority of Nigerians diasporans may not be able to participate in this sales due to the registration methods of the issue. Why not consider a change of name in order not to make Diasporans  believe they have been robbed. That would have save the current problem and then plan an alternative Diaspora Bond in line with new “dollar denominated issue” you referred to in your memo to us.
  4. If the implementation is reviewed based on market situation, something is not adding up. This in my opinion should be further explained by the DMO to clear up this issue as I have opined. If the registration for this Issue was approved way back in Feb/March 2017, based on my experience in the market, the marketing and offer process for the issue can actually be moved from the ” back closed door” marketing to ” open marketing and attraction of potential investors soon after final registration approval is secured. It then presupposes that the DMO must have conducted several meetings through the Co-managers to prospective investors and held meetings with these investors since that time or even prior to that time in a closed door session. Why did the DMO opted to provide a completely conflicting information on a ” Road Show ” announced for the marketing of the Issue only to receive another information barely a week after that this ” Diaspora Bond has been oversubscribed by 100%. Something is definitely not adding up here sir? To some of us active in the market, I will submit that as at the time of announcing that “Road Show ” subject, the investors are already known and accredited by the Co-managers, of course eager to impress and get the sales over for this small issue in a record time!. Again its normal and not a violation. But March to June is way too long time to keep a registered Bond without Sales or actual offer. It then means, the offer and sales has being going on underground without generality of the people knowing about it or who are the few Nigerians that was privileged to know this for a fact ? Can you please provide us with more details of these lapses in the time-line. We also know that their is always a time-limit approved for every issue to remain in the primary market for offering and sales. what is that time frame from and when does it lapse as  approved for the Nigerian Diaspora Bond. This will allow us know precisely what may have happened.  Why did DMO at this point not come out to explain the steps being taken by the Co-Managers to the Nigerians to allow us comprehend what is going on and appreciate the DMO predicament. Again, the Co-Managers are the ones calling the shoot and recommend approaches and strategies for everything, but DMO would have save this huge mistrust if they have come out to explain this to Nigerians and strongly advise us to await an alternative product being designed and produced for our target.
  5. There are so many missing link in the  manner this issue has been handled hence this mistrust and frustration from Nigerians and the believe  that may be looters of our Treasuries has cornered this issue with their loot again and all the unfriendly comments from innocent Nigerians. Now that you have mentioned that there is a new product being designed, it would be strongly suggested to have a special budget set aside in your office to effectively and adequately market this to Nigerians both home and abroad. Let them articulate this adequately and take it  that they have some right to know the facts and knowledge even though investing in this issues are not right but privileges, i insisted!  Please court proven and credible and visible Nigerian organizations to work with plus individual with cool headed perception to work with.

Dear Sir, Please assist us to clear these issue as it will also assist DMO remove any possible back- lashing  from Nigerians and mistrust the DMO in the future. We need to do this damage control approach to save the activities of the DMO as any negative impression may actually affect its outside credibility and scares away Investors generally. Remember the fuse the Ethiopian Electricity Power private unregistered Bond generated and the revelation that there was so much fraudulent practices that arose from that exercise. We do not want that headlines for DMO hence the need to leverage with the community.

I want to thank you for your attention

Dr. Kazeem Bello

Private Equity and Wealth Management Executive

New Jersey/New York, USA




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