Infrastructure: SEC urges states to embrace capital marketBy BOBRICKY 10:48 Thu, 11 Jun 2015 Comments
The Director-General, Securities and Exchange Commission, Mr. Mounir Gwarzo, has urged state governments to take advantage of the capital market to develop infrastructure in their respective states.
Gwarzo, who stated this in Katsina at the 18th Katsina State Trade Fair, said the states could access funds from the capital market through equities, bonds or mortgage bond securities.
A statement from the commission on Wednesday quoted Gwarzo, who was represented by the Head, Kano zonal office of SEC, Malam Adamu Sambo, as noting that the Nigerian capital market had the capacity to provide long term funds needed to solve the infrastructural challenges in the country.
He also said that the commission was attending the fair in order to manifest one of its broad functions, which is to carry out enlightenment on activities in the capital market.
He said, â€œWe are here to enlighten the Katsina State Government and its people on the need for them to take activities in the market as means for development.
We have new governments in place and we hope that they will access the capital market to raise floating funds to meet their development needs
â€œThe President has already said he is keen on development of the country and we, therefore, urge the state governments to use the capital market as a channel to raise funds. States have a lot of potential and we believe that they can use the capital market as one of the means of achieving their potential.â€
He noted that both the federal and state governments in the last dispensation realised the potential of the market as over N500bn was raised through bonds by various states for infrastructure development between 1999 and 2013.
Gwarzo expressed dismay at the attitude of some state governments, which claimed that they did not want to borrow funds for development in order not to leave their states with huge debts, saying such an attitude was counterproductive.
He said it was better to borrow to meet infrastructural needs than to be contented with just paying salaries.
The SEC boss added, â€œIndebtedness is not bad; what is bad is a situation where such funds are used for consumption.
â€œIf there is commensurate infrastructural development on ground, there is no regret in borrowing. Even abroad, states borrow for development.â€
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