Business
SEC is broke, says DG
The Securities and Exchange Commission (SEC) can hardly fulfil its financial obligations as it generates barely 50% of what covers its running cost, the Director General of the SEC, Mr Munir Gwarzo has said.
Gwarzo made this disclosure on Tuesday while addressing members of the House of Representatives Committee on Capital in Abuja.
Gwarzo also expressed concerns that the Treasury Single Account (TSA) has greatly reduced the capital market regulator’s ability to be flexible.
According to Gwarzo, “what we generate from the market cannot cover more than 50% of our cost, so more often we have to dip into that fund (funds saved by past SEC administrations) but now with the TSA and other things, that flexibility is being cut off because some of the interest income that we derive from those investment, we don’t enjoy them any longer.”
Giving the paucity of funds, the SEC, Gwarzo told the legislators, is now “running a very tight budget, given that the market has gone down and given that there are aspirations to move the market up we have to set aside some amount of money.”
Read also: ‘Nigeria requires 50,000MW to develop’
The SEC boss also disclosed that for “the budget of 2015, we had projection of N6.9 billion as our income but we were only able to make N4.9 billion because of the state of the market. We no longer take our staff on overseas and local training and our earning are now 30-40% less than we had in the past,” he cried to the legislators.
SEC also said that it aims to attract more retail investors into the Nigerian capital market to deepen and develop the market.
“As a country we have only less than 2% participation of retail investors in our market. Malaysia has 9%, South Africa 19%, USA 43%, and UK 13%. So our market is less being participated by the retail investors. Due to the dominance of the foreign investors, anytime they move out of the market the market goes down. Our effort is to see that in the next 5-10 years we raise the level of involvement of the retail investor to at least 5%.”
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