SEC Calls For Stronger Corporate Governance In Nigerian Banks

The Securities and Exchange Commission (SEC) has called on Nigerian banks to enhance corporate governance and strengthen risk management frameworks as the sector embarks on a critical recapitalisation process.

This initiative is part of a broader strategy to boost investor confidence and ensure long-term stability in the banking industry, valued at over $100 billion.

Speaking at the recent Capital Market Correspondents Association of Nigeria (CAMCAN) workshop in Lagos, Dr. Emomotimi Agama, SEC’s Director-General, emphasised the importance of transparency during the 2024–2026 recapitalisation exercise.

Represented by Mr. John Achile, Divisional Head of Legal and Enforcement, Dr. Agama reaffirmed SEC’s commitment to guiding issuers with clear regulatory frameworks to align the banking sector with global best practices.

The SEC is leveraging emerging technologies, including blockchain, to enhance transaction security and market transparency. Dr. Agama highlighted that these innovations, combined with digital literacy initiatives and collaborations with fintech companies, aim to democratise access to the capital market.

“Incorporating cutting-edge technologies and enhancing digital literacy are pivotal steps toward opening Nigeria’s capital markets to a more diverse array of investors,” he stated.

Despite challenges such as market volatility and regulatory constraints, the recapitalisation process has attracted strong investor interest, with oversubscriptions recorded in several offers. SEC has assured stakeholders of its dedication to improving disclosure standards and corporate governance practices to maintain investor confidence.

At the CAMCAN workshop, the commission discussed systemic risks, low retail investor participation, and liquidity constraints hindering market growth. The SEC is addressing these issues by developing new financial products, such as green bonds and sukuk, to attract varied investor segments and improve market inclusivity.

Also, the SEC addressed the persistent issue of unclaimed dividends, attributing it to investor non-compliance and information gaps. Dr. Agama reassured stakeholders that the SEC is actively working to resolve this challenge, ensuring that investors receive their dividends promptly.

Mrs. Chinyere Joel-Nwokeoma, Chairman of CAMCAN, highlighted the recapitalisation process as a critical step in rebuilding trust within Nigeria’s capital market. She emphasised the need for collaboration between regulators, banks, and investors to strengthen governance and ensure sustainability.

“The recapitalisation process provides a unique opportunity to restore confidence in our financial systems while supporting the broader economy,” Mrs. Joel-Nwokeoma noted.

The SEC’s proactive measures to streamline governance, leverage technology, and promote inclusivity position Nigeria’s banking sector as a cornerstone for economic growth. As the recapitalisation exercise gains momentum, the sector’s transformation promises to reinforce Nigeria’s capital market as a dynamic and robust investment platform.