The Securities and Exchange Commission (SEC) has clarified that its recent decision to grant approval-in-principle to two cryptocurrency exchanges, Busha Digital Limited and Quidax Technologies Limited, is aimed at encouraging youth participation in Nigeria’s capital market while ensuring adequate investor protection.

Emomotimi Agama, the Director-General of the SEC, highlighted that the move aligns with President Bola Tinubu’s commitment to engaging Nigeria’s youthful population. Agama explained that the approval will create a structure that enhances the participation of young Nigerians in the capital market, particularly in the digital asset space.

“A lot of young Nigerians are fully involved in digital assets, and we cannot shut the door against them,” Agama said. “Rather, the intention of Mr. President is to have them inclusive in the capital market, and that is why we are ensuring that there is regulation and no one is hurt at the end of the day. That’s our responsibility at the SEC, by protecting investors and developing the market.”

Agama emphasized that the commission’s approval is still at an incubation stage, describing it as a “controlled experiment.” He said the SEC will closely monitor the operations of the exchanges to assess the risks they pose to the economy, investors, and themselves as operators.

“It gives us an opportunity to know exactly what they are doing, the risks they pose to our economy, investors, and even to themselves,” he explained. “We are making sure they operate within regulations similar to what is obtainable in other jurisdictions.”

Agama explained SEC’s regulatory approach to digital exchanges is part of a broader strategy to embrace innovation without compromising market stability.

The commission’s Virtual Assets Service Providers (VASP) Regulation framework allows the SEC to fully understand crypto exchanges and virtual financial assets, safeguarding the financial ecosystem from potential risks.

“In our bid not to stifle innovation, we set up a ‘Sound Box’ to understand exactly what these companies are getting into, how it affects customers, the Nigerian public, and the economy,” Agama added. “It is important that they meet the necessary regulatory guidelines before full approval is granted.”

He noted that the SEC is committed to fostering trust and confidence in the capital market, particularly as it relates to integrating digital asset exchanges into the regulated environment.

The introduction of these exchanges, Agama said, opens up new opportunities for younger Nigerians who have shown growing interest in the digital asset space.

“By including these innovations within the broader capital market structure, we are ensuring a balance between fostering innovation and protecting investors,” Agama concluded.

Unity Bank Plc has projected gross earnings of N27 billion and a Profit After Tax of N4 billion in Q4, 2024, in its latest earnings forecast released to the Nigerian Exchange Group.

Although the projected gross earnings represent a marginal increase from the N26 billion projected for Q3 2024, the lender continues to maintain a profitable outlook, with pre-tax profit expected at N4.2 billion.

An analysis of the earnings forecast shows that the lender also expects interest income to rise from N23 billion to N24.5 billion, with net revenue expected to rise marginally by 1.0% to N7.2 billion within the quarter compared to N6.5 billion in Q3, 2024.

Net operating income is projected at N12 billion, while cash flow from financing activities is projected to rise to N481.4 billion from N353.6 billion, a 1.3% projected increase on a quarter-on-quarter basis.

This projected growth in cash flow from financing activities continues to reflect the lender’s growing liquidity position which is essential for sustained business operations.

The lender said it expects to cover the milestones with consistent optimistic outlook in its projection, barring any significant changes in the operating environment, under which the assumptions were made.

The lender noted that it will continue to deliver top-notch customer-centric products and services, especially in the digital lending space following the roll-out of enhanced platforms and channels for superlative customer experiences.

Analysts are of the view that the Q4 forecast reflect a steady growth trajectory on the back of key performance indicators and strategic repositioning to hedge the challenging market conditions.

Fiscal Responsibility Commission (FRC) has decried the rampant collusion between banks and state governments in violating the provisions of the Fiscal Responsibility Act.

Barrister Victor Muruako, chairman of FRC, who spoke at the National Summit of Fiscal Responsibility in Abuja, noted that banks had been aiding state governments in circumventing the law, particularly with respect to borrowing.

Muruako cited Section 44.1 of the Fiscal Responsibility Act which mandates that any government or its agencies intending to borrow funds must present a detailed cost-benefit analysis of the proposed borrowing.

He said, “We are witnessing a troubling decline in accountability. In one instance, a state government’s secretary simply signed a declaration claiming compliance with the Act, which then allowed the government to proceed with borrowing. This is deeply alarming.”

He further criticised banks for accepting such documents, noting that financial institutions had made it convenient to approve loans without thoroughly verifying compliance with the law.

He said, “We have reached out to banks and carried out extensive sensitisation efforts, but it is clear that more needs to be done. We cannot afford to remain silent any longer. This is a matter of national urgency.”

On his part, Senator George Akume, secretary to the government of the federation (SGF), directed the FRC to extend its technical support to local governments.