Nigeria: SEC Urges Banks to Strengthen Corporate Governance Amid Recapitalisation Drive

The Securities and Exchange Commission (SEC) has urged banks to enhance their corporate governance principles and risk management frameworks to bolster investor confidence during the ongoing recapitalisation exercise.

Dr. Emomotimi Agama, SEC’s Director-General, delivered this message at the annual workshop of the Capital Market Correspondents Association of Nigeria (CAMCAN), held in Lagos. The event, themed “Recapitalisation: Bridging the Gap Between Investors and Issuers in the Nigerian Capital Market,” highlighted the critical role of governance and transparency in fostering a vibrant capital market.

Strengthening Corporate Governance for Growth

Represented by Mr. John Achile, Divisional Head of Legal and Enforcement at SEC, Dr. Agama noted that the 2024–2026 banking sector recapitalisation framework provides clear guidance to issuers while safeguarding investors’ interests.

“Our commitment is anchored on fostering transparency and efficiency throughout the recapitalisation process. By harnessing innovation for inclusive growth, we aim to bridge the gap between issuers and investors,” he said.

SEC is exploring the use of blockchain technology to ensure secure and transparent transaction processing, which is expected to redefine trust in the Nigerian capital market.

Investor Confidence and Oversubscription

Dr. Agama highlighted the strong investor confidence evidenced by the oversubscription of most recapitalisation offers in 2024. To sustain this momentum, SEC has prioritized:

• Enhancing disclosure standards.
• Promoting best practices in corporate governance.
• Expanding financial literacy campaigns to democratize market access.

“By collaborating with fintech companies, we aim to provide low-entry investment options, making the capital market more accessible to a broader audience,” he added.

Addressing Challenges and Opportunities

Despite progress, challenges such as market volatility, systemic risks, limited retail participation, and investor skepticism persist. Dr. Agama emphasized the need for collaboration among regulators, issuers, and investors to overcome these hurdles.

“We have opportunities to leverage technology to deepen financial inclusion, enhance market liquidity, and develop innovative products like green bonds and sukuk to attract diverse investors,” he noted.

Commitment to Transparency and Oversight

During a panel discussion on market infrastructure, Mr. Achile underscored SEC’s dedication to due diligence in evaluating technological innovations. He highlighted the commission’s dual role in regulating the market and protecting investors, ensuring compliance with regulatory requirements to maintain market integrity.

On the issue of rising unclaimed dividends, Mr. Achile attributed the problem to information gaps and non-compliance by investors. He assured stakeholders that SEC would continue working to ensure timely dividend payments while strengthening investor protections.

Collaborative Efforts for a Vibrant Capital Market

In her opening remarks, CAMCAN Chairperson Mrs. Chinyere Joel-Nwokeoma described bank recapitalisation as an opportunity to rebuild trust and foster sustainable growth in the capital market. She called for collaboration to bridge the gap between investors and issuers, emphasizing the importance of transparency and cooperation.

“We must collectively strengthen corporate governance and risk management practices, while enhancing disclosure requirements, to create a more inclusive and robust Nigerian capital market,” she stated.

The workshop reinforced the SEC’s resolve to create an enabling environment for seamless capital formation and sustainable market growth.