The Securities and Exchange Commission (SEC) has announced plans to enhance the regulatory framework for borrowing by governments and corporates, with a focus on sustainability and efficiency.
Dr. Emomotimi Agama, Director-General of the SEC, emphasized the importance of sustainable borrowing practices, particularly in light of the Supreme Court’s directive mandating direct subventions to the 774 local government areas from the Federal Government.
“We want to be sure of sustainability in both government borrowing, municipal and state governments particularly with the new Supreme Court order regarding the 774 local government areas receiving direct subvention from the Federal Government,” Agama stated. “It therefore becomes important that we have in the management of such resources via strategic and focused borrowing to help the developments in those sectors.”
On the corporate side, the SEC has introduced new rules for Central Counter Parties (CCPs), aimed at simplifying and streamlining the borrowing process for Nigerian companies. These rules, set to take effect in 2025, will create a more efficient and transparent environment for corporate borrowing while fostering growth in the capital market.
“As a Commission, we have established those new rules and they are going to be functional in 2025. We want to make borrowing a seamless and effortless process for Nigerian companies,” Agama said.
The SEC is also actively promoting the development of the Nigerian capital market by introducing new products and derivatives.
“Nigeria for a long time has 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,” Agama noted.
The SEC’s initiatives are expected to strengthen Nigeria’s financial system, enhance market confidence, and support broader economic development by creating a more conducive environment for borrowing and investment.
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