The Securities and Exchange Commission has announced plans to strengthen the regulatory framework for borrowing by both governments and corporate entities in Nigeria.
SEC’s Director-General, Dr. Emomotimi Agama, made the announcement in a statement issued on Wednesday in Lagos, emphasizing the importance of borrowing as a key component of the financial system and the need for strategic resource management.
Dr. Agama pointed to the recent Supreme Court ruling requiring direct funds transfers from the Federal Government to Nigeria’s 774 Local Government Areas, which has heightened the need for a more robust borrowing framework. He explained that managing government borrowing, at both municipal and state levels, is crucial for ensuring sustainable development and economic progress.
“Borrowing is an integral part of the financial system. We need strategic and focused borrowing to drive growth in various sectors,” Dr. Agama said.
On corporate borrowing, Dr. Agama revealed that SEC is introducing new rules for Central Counter Parties, aimed at reshaping Nigeria’s capital market. These changes, effective in 2025, will make borrowing more seamless for Nigerian companies and help diversify the financial market by introducing new products and opportunities.
Dr. Agama also highlighted the SEC’s focus on introducing derivatives to the Nigerian market, which would contribute to market diversification. He emphasized the need for enabling laws to ensure confidence in derivatives trading, with new regulations aimed at providing a safer and more predictable trading environment.
