By Peter Egwuatu
The Securities and Exchange Commission (SEC), has disclosed that state governments in Nigeria have borrowed not less than N900 billion from the capital market since 1978.
The Director General, SEC, Mr Lamido Yuguda, disclosure this at a webinar organised by the Nigerian Stock Exchange (NSE) on ways sub-nationals can raise funds through the sale of state-owned enterprises.
The SEC boss who was represented by the Executive Commissioner in charge of Legal and Enforcement, Mr Reginald Karawusa, disclosed that this amount was raised from the market through debt issuances since 1978.
Speaking on ‘Privatisation in Nigeria and the Outlook for Sub-national Economic Development’, the theme of an event organised in partnership with the Nigeria Governors’ Forum (NGF) and the Nigerian Investment Promotion Council (NIPC), the he said a significant part of these funds were deployed to financing capital projects.
He stated: “Sub-national issuers in Nigeria have been able to access the debt capital market over the years since 1978, state governments in Nigeria have raised close to N900 billion through debt issuances. A significant part of these funds were deployed to finance capital projects across the country.’’
However, he said the ability of states to continue to borrow in a sustainable manner has been severely impacted in recent times, adding that with the huge infrastructure gap, decreased allocation from the federal purse owing to relatively low oil revenue and the depressed level of internally generated revenues, states are barely able to pay salaries after servicing their outstanding loan obligations.
Consequently, he advised that privatisation is an avenue for governments to unlock economic potentials inherent in government owned enterprises, adding that the focus on Nigeria’s journey on privatisation has largely been on the Federal Government.
Yuguda also said: “Several enterprises are still owned and controlled by the government, both at the state and federal levels. A number of these entities have the capacities to generate cash flows and corporate profitability.’’