FG’s 2017 budget will increase spending in productive sector —SEC

DIRECTOR-General of the Securities and Exchange Commission (SEC), Mr Mounir Gwarzo, has said that the Federal Government’s 2017 budget is aimed at increasing the country’s productive sector spending.

Gwarzo told the News Agency of Nigeria (NAN) on Monday in Abuja that the budget was aimed at resolving most of the economic challenges currently facing the country.

“We believe that the government budget for 2017 is a very promising budget. It’s clearly a budget that is aimed at solving some of our problems. And I think the path government has taken is in my opinion the right one.

“From an economic point of view, when a country is in recession there are basically two economic models that you use in solving that recession.

“You either use what we call the classical model, or some people call it the monetary model. The classical model emphasizes on using the monetary policies, interest rates and exchange rate to address the recession.

“The other model is what economists call the Keynesian model or some people call the fiscal model where government will now use fiscal interventions in terms of spending to reflate the economy; I think that this government is looking at using the fiscal aspect by increasing spending.

“By the time you increase spending the disposable income of people will go up. By the time it goes up, there will be savings and when there is savings there will be investment. And investment will now create growth and I think that is the focus of this budget which to us is something that is in the right direction.”

According to Gwarzo, countries that had gone through depression and recession used the fiscal model to solve their economic issues successfully.

He added that the current administration is cutting down excess spending and ensuring those excesses are invested in the productive sector.

Gwarzo said the government was also revitalising the commodity exchange in line with its efforts to diversify and grow the agricultural sector.

According to the director-general, agriculture is the main stay of any economy, adding that history has shown that no country has actually progressed by relying only on the oil sector.

Meanwhile, SEC said it has instituted a N5 billion investors protection fund to compensate investors as contained in the Capital Market Master Plan.

Mr Gwarzo said this in an interview with the News Agency of Nigeria (NAN) on Monday in Abuja.

According to Gwarzo, the commission will pay an investor as much as N200,000 as compensation so as to bring succour and restore confidence of retail investors in the capital market.

“We have been doing quite well, the electronic dividend, the direct cash settlement, the dematerialisation I mentioned are all part of the implementation of the master plan.

“We have also done other things like the recapitalisation; we have instituted a corporate governance scorecard, requiring each company to comply with the score card.

“We have also introduced our national investor protection fund which caters for investors in the capital market as long as that investment was registered by SEC, and as long as the operator was also registered to undertake that function.

“If there are some problems that led to loss of money, the national investors protection fund would compensate the investor up to a certain limit; it has a maximum of N200,000.

“We have been talking about amending some of our laws in the capital market.

“We have also set up an advocacy group that will look at the market, and will look at how the capital market can be on the front burner of the Nigerian economy.

“So in terms of the implementation of the master plan we are doing quite well. It is very tedious.  But we believe that the implementation will certainly raise the standards of our market.”

According to Gwarzo, a board had been set up to help run the affairs of the fund and its members would ensure that complaints from investors were genuine.

“If you lodge any complaint, there are a lot of rigorous processes of verification to ascertain that your complaint is genuine and that you are actually the true owner of that investment.

“The whole essence of giving the N200,000 is to temporarily ease the financial pressure the person is going through.  Last year, we paid about 320 beneficiaries.”