SEC to strengthen borrowing regulatory framework in Nigeria

• Published On: 09 January 2025 at 20:06

The Securities and Exchange Commission of Nigeria has announced plans to strengthen the regulatory framework for borrowing by both governments and corporate entities.

Dr. Emomotimi Agama, Director-General of the SEC, made the announcement in a statement issued in Lagos on Wednesday, emphasising the importance of borrowing as a key component of the financial system, as well as the need for strategic resource management.

Dr. Agama cited a recent Supreme Court decision requiring direct funds transfers from the Federal Government to Nigeria's 774 Local Government Areas, emphasising the need for a more robust borrowing framework. He explained that managing government borrowing, both at the municipal and state levels, is critical to ensuring long-term development and economic progress.

"Borrowing is an essential component of the financial system." "We need strategic and focused borrowing to drive growth in various sectors," Dr. Agama stated.

In terms of corporate borrowing, Dr. Agama revealed that the SEC is implementing new rules for Central Counter Parties with the goal of reshaping Nigeria's capital market. These changes, which take effect in 2025, will make borrowing easier for Nigerian companies while also diversifying the financial market by introducing new products and opportunities.

Dr. Agama also emphasised the SEC's focus on introducing derivatives to the Nigerian market, which will help to diversify the market. He emphasised the importance of enabling laws to restore confidence in derivatives trading, as well as new regulations aimed at making the trading environment safer and more predictable.