Demystifying Securities Investment Management:Book Review, By Emman Usman Shehu

Albert Einstein, famous for his Special Relativity Theory which in some way changed the world, at least from the perspective of physics, was also a firm proponent of social justice and responsibility. But he was also something of a philosopher. Some of his thoughts reflect the reality of life. For instance, he is quoted as saying: “Two things are infinite: the universe and human stupidity; and I am not sure about the universe.”
But my favourite Einstein quote is that which states” “ A ship is always safe at the shore – but that is NOT what it is built for.” That succinctly summarises the fact that we cannot run away from taking risks, because life itself is about taking risks.
I will take a deliberate risk by starting this review in violation of our natural reading order. Towards the end of Eghosa Imade’s book, Security Investment Management, there is an illustration that has become universally familiar. Inspired by Dante’s The Divine Comedy,Auguste Rodin’s bronze sculpture of a nude figure sitting on a rock with his chin on one hand as though in deep thought, is referred to as “The Thinker”.
Since its public appearance in 1904, it has been cast in multiple versions around the world and has become a fitting image that represents philosophy. But then our concern here is about finance, economy and possibly accounting. Accounting, for me, suggests accountability, something we do not seem to truly bother about in this country and that has led to a lot of our deficiencies that have become the Nigerian disease. But more on this later.
The progress of a society inevitably manifest through the quality of thinking that is encouraged. It does not matter the quantity of resources available to that society as long as the capacity to utilize those potentials are not harnessed. In a sense this encapsulates the Nigerian situation. A country bursting with enormous human and natural resources, that it used to be referred to as the “Giant of Africa”. A potential it has woefully failed to fulfill.
That appellation was not just a reference to its geographical, but essentially to its large population and economy. The preface of Imade’s book is a telling commentary on the relationship between population and economy, two important development indices. It is also, unfortunately, a sad commentary on Nigeria.
For instance, he notes that: “Sorely structured as an import-dependent economy, the volume of trade economic activity by Nigeria is built around a sole natural resource: crude oil. Worse, with dysfunctional refineries at home, even the critical value-added jobs are also shipped abroad, thereby docking the economy of the competitiveness that should naturally be hers, were the consummable petroleum products processed by our citizens here, giving the nation some leverage to improve its balance of payment profile. That mirrors our crass dependency on other economies for such a pivotal commodity with overarching tendencies on the national economy and security. Precisely because we export jobs overseas, our GDP, indeed our national income, is grossly trimmed by the avoidable huge import bill.”
Imade further adds: “ Therefore our exchange rate is blighted by the vagaries associated with the commodity in the international market. Which is why the economy is afflicted by the Dutch disease; a situation whereby a nation’s foreign reserve grows for exogeneous reasons and not because of the value adding activities of its citizens. The egregious and widespread poverty, unemployment, privation, destitution and misery poignantly underscore this point.”
Indeed just as there is a Dutch disease, we must frankly admit that there is a Nigerian disease, which the last part of the aforementioned quote hints at. We must not be lulled into not doing the needfulls, a reality check and taking pragmatic steps however risky they may be. Much better than being stuck in the harbour of our failure.
The current rebasing euphoria only restates the familiar anthem of potentials. Nigeria will always have economic possibilities. The challenge is to go beyond the possibilities and make them into practical economic realities. We do not even have to radically think out of the box, so to speak, because the lessons of history all over the world provide solutions applicable to our own situation. It just requires taking the appropriate ones.
First step is accepting that we have a problem. Second is making the right diagnosis. For instance Imade notes: “ The fallacy of financialism and the specious outlook of a strong economy fly in the face of an uncompetitive and wobbly manufacturing sector, a small clique of ingratiating businessmen , spoilt with patronage by their cronies holding evanescent state power; a condition that accentuates the lopsideness of wealth and income distribution in the country.”
Nigeria at this point needs a leadership that has the corrective will. A leadership that is willing to take risks in properly and actively diversifying the economy, and not docking the economy with manipulative tendencies that amount to wating time and resources, while we remain stuck in this pitiful harbour.
What Imade’s highly technical book offers, for instance, to borrow his own phrase, is a means of economic wellness through the capital market. That can only be possible when we have a proper understanding of what it entails, especially in the area of Securities Investment Management.
The book started life as a Masters thesis, as Imade himself admits, and benefits from a rigourous study of relevant texts providing a formidable cornerstone. Clearly, the work has also benefitted from the author’s vast experience as an accountant, financial educator and public commentator. Therefor what is on offer is a treasure trove that will dispel fears about financial investment management. It will help those willing “to seek better and more profitable ways of harvesting a fair return” without taking unnecessary risks. This detailed exploration of investment management in almost 240 pages is commendable. It shows us , apart from the technicalities, that there are peculiar risks with well documented examples. This therefore gives us the power of relevant knowledge to circumnavigate the potential minefields as we steer out of the harbour.
We can call this work a homegrown solution and it is fittingly so. Imade shows, through this work, the can do spirit of the Nigerian especially if he is given the enabling environment. Our dependency penchant can be reversed if we truly wish to change by boldly taking risks. We can have our own Einsteins and Rodins who can make impactful contributions not only in Nigeria, but also beyond. Eghosa Imade, take a well-deserved bow.
*Dr Shehu is a literary activist