The Senate has raised the alarm that the nation’s capital market regulator, Security and Exchange Commission (SEC) is going bankrupt.
The lawmakers made the observation on Thursday when the Director-General of the SEC, Lamido Yuguda, made a presentation before the Senate Joint Committees on the 2022-2024 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy (FSP).
Senator representing Lagos West and Chairman Senate Committee on Finance, Solomon Adeola, who incidentally is the Chairman of the Senate Joint Committee was the first to raise observation on the personnel cost of the SEC.
SEC DG had in his report disclosed that the capital market regulatory body projected revenue for 2021 was N11,502,340,000,000.00 with a personnel cost of N10,239,933,504.65.
Shortly after his presentation, Senator Adeola raised concern that the personnel cost of the Commission was too much on the high side in the last two years.
He said: “This budget gives us a wrong impression about SEC. You are a regulator to businesses that are making money but you aren’t making money. You may need to look at how to regulate your personnel to generate money. You need to cut down on costs.
“Your personnel cost, your top profile takes about 70% of total emolument of N9 billion, only 30% go to lower cadre.
“We should know what is happening. This is the second year you are coming with a deficit budget.”
In his defence, SEC DG said his Commission has been adversely affected by the market meltdown and the global coronavirus pandemic.
Not impressed by his reaction, immediate past Borno State governor and Senator representing Borno Central, Kashim Shettima asked him to think out of the box, as he cautioned that SEC was treading the path of insolvency with its humongous personnel cost.
“In the next two years, you are going to go bankrupt. Right now you are in deficit and except you come up with solutions, you are going to go insolvent and won’t be able to meet your needs.
“We are challenging you to go back to the drawing board and find solutions to your financial situation.”
Senator representing Osun west, Adelere Oriolowo, advised the SEC DG to expand its scope of revenue generation amidst what he called dwindling transactions on the floor of the Stock Exchange.
Earlier in his presentation, Executive Vice Chairman, National Communications Commission (NCC), Engineer Umar Danbatta told the Senate Committee that the revenue profile of the telecommunication regulatory agency was impressive as it noted that it had since generated N181 billion in the first quarter of the year as against the initial projection of N162 billion.
The lawmakers while commending the NCC management however said they expected its revenue profile to be higher than the figure released.
The Senate Joint Committee recalled that some of the revenue-generating agencies of the federal government have since taken advantage of the automated payment mechanism and they expect that it would reflect, correspondingly in the revenue of the regulator of the telecommunication operators.
Engineer Danbatta assured the Senate that the NCC was already making efforts to increase its capacity to generate revenue, using modern technology.
He said: “Our inability to audit the revenue generated by telecom operators was because we haven’t deployed adequate technology. Before we came, there was no such efforts and we have said we shouldn’t rely on the annual audited reports of the telecom operators but look for an independent source, using modern technology.
“There is a Committee in place and it is working. It is tasked with how to maximize the revenue of the NCC. It is expected to make recommendations.”
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