SEC to governors: You’re free to borrow but…

In from Ali Smart….

The Securities and Exchange Commission (SEC) has urged state governors to go ahead and borrow in order to augment their allocation but with a caveat: such borrowings must not be for consumption.

In a statement, SEC Director General Mounir Gwarzo in Katsina at the SEC Day at the ongoing 18th Katsina State Trade Fair, said cheap funds can be accessed through equities, bonds or mortgage bond securities.

Represented by Head Kano Zonal office of SEC, Malam Adamu Sambo, Gwarzo, said the Nigerian capital market has the capacity to provide long term funds needed to solve the infrastructural challenges in the country and act as a springboard that would fast track development of states.

He disclosed that the Commission was attending the fair in order to manifest one of its broad functions which is to carry out enlightenment on the activities in the market.

He noted that both the federal and state governments in the last dispensation tasted the potential of the market as over N500 billion was raised through bonds by various states for infrastructure development between 1999 and 2013.

Gwarzo expressed dismay at the attitude of some state governments who claim they do not want to borrow funds for development in order not to leave the states with huge debts saying such attitude is counterproductive as it is better to borrow to meet infrastructural needs than to be contented with just paying salaries.

He said “indebtedness is not bad, what is bad is a situation where such funds are used for consumption. If there is commensurate infrastructural development on ground, there is no regret in borrowing. Even abroad, states borrow for development.”

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