The House Committee on Capital Market and Institutions chaired by Rep. Babangida Ibrahim met with the Securities and Exchange Commission (SEC) for the 2021 budget defence at the National Assembly on Thursday.
The Committee commended SEC for its efforts to widen and boost the income of the market as well as its efforts to increase participants’ confidence despite the harsh effects of the capital market meltdown and the Covid-19 pandemic. Rep. Babangida, however, cautioned that it would be a shame for the nation to go back to recession, hence more efforts should be put in place to ensure financial projections are realised. He called for a realistic budget that can be achieved on behalf of Nigerians. He assured SEC that the committee is committed to ensure that the commission succeeds, and that depending on the economic realities of the year 2021. SEC could come back to the committee for an upward review of its estimates if the year turns out more favourable, business-wise. The committee also called for better government policies to boost market confidence and participation.
In a presentation, the Director General of SEC, Lamido Yuguda, said the Covid-19 pandemic adversely affected the commission’s efforts under the 2020 Appropriation, as its revenue is directly generated from market participation, not from government coffers. He said as a direct result of the Covid-19 pandemic, markets had to shut down, a development that caused huge revenue losses for many months. Yuguda told the committee that as of November 2020, the commission’s 2020 budget revenue achievements stood at 70 percent of its projection, while securities registration is at 84 percent achievement for the same period. He said the 2021 budget proposal was drafted under difficult conditions as a result of the lockdown, which caused serious operational revenue and manpower shortfall. Yuguda revealed that SEC has been running on deficit as a result of the capital market meltdown of 2008/2009 as many companies lost confidence in the capital market. The market had been steadily reviving before the Covid-19 pandemic dealt a huge blow to it, he added. SEC, he said, has not been able to recruit staff for a long time due to these financial shortfalls and that it is looking for other ways of generating revenue such as the regulation of digital trading, international collaborations, commodities exchanges. and the strengthening of its training institute to be of international standard to generate funds, especially continentally.