SEC to Strengthen Borrowing Framework for Governments, Corporates

The Securities and Exchange Commission (SEC) has pledged to enhance its regulatory framework for borrowing by government entities and corporate organizations.

Emomotimi Agama, Director General of SEC, revealed this in an interview, where he emphasized the pivotal role borrowing plays in sustaining the financial system and fostering economic growth.

He highlighted the need for strategic management of resources, particularly in light of the Supreme Court’s recent ruling mandating direct federal allocations to Nigeria’s 774 local government areas.

Agama stated, “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.

“Hence, we want to ensure sustainability in both government borrowing, especially for municipal and state governments, given the new Supreme Court order regarding local government allocations.”

He further stressed the importance of structured borrowing in supporting development across sectors. For corporate organizations, the SEC DG noted that the Commission is revolutionizing the landscape with the introduction of new rules on Central Counter Parties (CCPs).

“As a Commission, we have established those new rules, and they will become operational in 2025. Our aim is to make borrowing a seamless and effortless process for Nigerian companies,” he said.

Agama added that SEC was also committed to diversifying the Nigerian capital market, which had long been dominated by a mono-product focus. He disclosed plans to introduce derivatives trading in 2025, supported by enabling laws and regulations to foster growth and confidence.

“To build confidence in derivatives trading, we aim to provide clear exemptions for these transactions from general insolvency laws, creating a safer and more predictable trading environment. By doing this, we hope to attract more players and provide new opportunities for every Nigerian,” Agama concluded.

The SEC reiterated its commitment to creating a safer and more robust trading environment to strengthen the Nigerian capital market and support sustainable economic development.