How States Can Generate More Revenue- SEC

The Acting Director-General of the Securities and Exchange Commission Nigeria (SEC), Mary Uduk has given advice to state governments in the country on how to boost Internally Generated Revenue (IGR).

According to Uduk,  to increase IGR and carry out developmental projects, states need to establish companies for specific target projects.

Uduk gave the advice on Tuesday while speaking at the ongoing Federation Account Allocation Committee (FAAC) 2020 Retreat with the theme: “Efficient Federation Revenue Allocation as a Nexus for National Economic Diversification” in Lagos.

 “States could further explore the establishment of project companies for specific target projects such as sugar cane factory, a cocoa processing factory or other projects with income and export potential which has the ability to generate revenue.

The Acting DG noted that these companies, if set up as public companies with private sector participation, even though with a majority of the shares owned by the state, can still issue its securities to the public.

“This is to raise capital on an ongoing basis to meet the working capital needs of the companies. Being set up as a public company confers the transparency and corporate governance standards which foreign investors require”.

Noting that some states shun the capital market in financing their projects due to the rigorous conditions put in place by SEC Uduk stressed that borrowing from the capital market was cheaper for the states than conventional banks which have higher interest rates and shorter repayment periods.