SEC to Revamp Borrowing Framework for Governments and Corporates
By Patience Ikpeme
The Securities and Exchange Commission (SEC) has vowed to improve the regulatory framework for borrowing by governments and corporate entities in Nigeria.
Dr. Emomotimi Agama, Director General of the SEC, disclosed this in an interview, emphasizing the importance of borrowing in the financial system and its role in driving sustainable development.
“Improving the framework for borrowing is very important because borrowing is part of the financial system, and we can only make much of the move we want to make if there is enough funding,” Dr. Agama said.
He highlighted the need for sustainability in government borrowing, particularly in light of the recent Supreme Court decision mandating direct subvention to the 774 local government areas from the Federal Government.
“With the new Supreme Court order regarding the 774 local government areas receiving direct subvention from the Federal Government, it becomes important to manage such resources via strategic and focused borrowing to help developments in those sectors,” he added.
On corporate borrowing, Dr. Agama outlined the Commission’s progress in implementing new rules on Central Counter Parties (CCPs), a move he described as pivotal to Nigeria’s economic growth.
“The new rules on CCPs have become so critical for Nigeria’s development, especially for corporates in raising capital. As a Commission, we have established those new rules, and they are going to be functional in 2025,” he said.
According to him, the SEC aims to make borrowing seamless and effortless for Nigerian companies while driving innovation in the capital market.
“It is very important that as we drive the growth of the Nigerian capital market, we also drive new products and new opportunities for every Nigerian. Nigeria has long been seen as a mono-product market, but the Year 2025 will be different because we will continue to drive the process of introducing derivatives into the capital market,” Dr. Agama stated.
To achieve this, he emphasized the need for enabling laws and regulations, particularly in derivatives trading.
“To build confidence in derivatives trading, we hope to provide a clear direction for these transactions. We aim to provide a clear exemption of these transactions from general insolvency laws, creating a safer and more predictable trading environment,” he explained.
Dr. Agama reiterated the SEC’s commitment to creating a safer trading environment, building market confidence, and attracting more players through robust regulations and laws.
“With enabling regulations, we can provide a platform that ensures transparency, predictability, and growth in Nigeria’s financial ecosystem,” he concluded.
The SEC’s initiatives are expected to foster a more dynamic financial system, ensuring that both governments and corporates can access the capital they need to drive development and economic growth.
