States Issue N500b Bonds In 14 Years | Independent Newspapers Limited
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States Issue N500b Bonds In 14 Years

Posted: Jun 11, 2015 at 12:51 am   /   by   /   comments (0)

By Obas Esiedesa,  Abuja


State governments in the country have raised a combined N500 billion in 14 years, through bonds from the nation’s capital market.

The Director General of Securities and Exchange Commission, SEC, Mounir Gwarzo, stated this in Katsina during the SEC Day at the ongoing 18th Katsina State Trade Fair just as he urged them to borrow more for infrastructure development in their states.

He said: “We are here to enlighten the Katsina State Government and its people on the need for them to take activities in the market as a means for development. We have a new government in place and we hope that they will access the capital market to raise floating funds to meet their development needs

“The 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 potentials and we believe that they can use the capital market as one of the means of achieving their potentials” he said.

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 from the nation’s bourse through bonds by various states for infrastructure development between 1999 and 2013.

He added that such advantages can be accessed through equities, bonds or mortgage bond securities.

Gwarzo, who was represented by Head Kano Zonal office of SEC, Adamu Sambo, advised them to take advantage of the numerous benefits inherent in the market to bring about desired development and that the capital market has the capacity to provide long term funds needed to solve the infrastructural challenges currently facing the country.

He noted that there was nothing wrong in state governments borrowing, stressing that such monies must be applied to infrastructure development rather than for consumption purposes. He said the market can act as a springboard that would fast track development of their states.

“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”.

He 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 counter-productive as it is better to borrow to meet infrastructural needs than to be contented with just paying salaries.