The Securities and Exchange Commission (SEC) has disclosed its intention to improve the regulatory framework governing borrowing by government entities and corporate organizations. This move, according to SEC, is aimed at fostering sustainable financial practices and driving economic growth across Nigeria.
Speaking during an interview, SEC Director General, Dr. Emomotimi Agama, highlighted the critical role borrowing plays in the financial ecosystem. He stressed that the Commission is committed to ensuring sustainability in borrowing practices, particularly in light of the Supreme Court’s recent directive mandating direct federal allocations to Nigeria’s 774 local government areas.
“Borrowing is an essential part of the financial system. It fuels the funding needed to drive development at various levels. With this new Supreme Court order, it is even more crucial to ensure that state and municipal governments adopt strategic and focused borrowing practices to manage their resources effectively,” Agama said.
The DG explained that the Commission is also making strides in transforming corporate borrowing through the introduction of new rules on Central Counter Parties (CCPs). These rules, set to become operational in 2025, aim to simplify access to capital for Nigerian companies while enhancing transparency and efficiency.
“As a Commission, we are building an environment where borrowing for corporates becomes seamless and effortless. These new rules will provide a platform for businesses to raise funds more efficiently, thus unlocking opportunities for growth,” he stated.
Agama further revealed that the Commission is working to diversify Nigeria’s capital market by expanding into derivatives trading. He noted that the introduction of derivatives would represent a significant milestone for the country’s financial sector, reducing its over-reliance on traditional financial products.
“To succeed, we must build confidence in derivatives trading. This involves providing clear exemptions for these transactions from general insolvency laws, creating a safer and more predictable environment for investors,” he said.
The SEC DG underscored the Commission’s commitment to creating a robust and investor-friendly market, pointing out that the new regulations would boost confidence, attract more players, and foster innovation in the financial system.
“We are not just focused on improving borrowing practices but also on driving growth through the introduction of new products and opportunities. Our aim is to ensure that every Nigerian benefits from a well-structured, dynamic capital market,” Agama added.
The improved borrowing framework, combined with a push for innovation, positions SEC as a critical driver of sustainable financial growth in Nigeria. With these reforms, the Commission seeks to enable a more diversified and resilient economy by 2025.
