Idris Ahmed
17 June 2009
Abuja — Ogun State Governor Otumba Gbenga Daniel yesterday visited the Securities and Exchange Commission (SEC), Abuja, to seek approval to raise N50 billion bond for infrastructural development.
Section of the State House of Assembly is already against the move but Daniel said the lawmakers have no constitutional power to stop him because it is purely an executive affairs. SEC said it will not bend rules to accommodate quest by any state to raise funds through the capital market. "They must meet all the requirements", Chairman of Board of SEC, Senator Udoma Udo Udoma said.
Governor Daniel said N28 billion will be raised in the first instance. He did not say the tenor of the bond. He said the entire funds will be used to finance projects like road, water electricity and other infrastructural projects. "While it is possible to fiancé some projects through short term credits, we deemed it fit to go into the capital market to finance our long term aspirations through the bond. Give us support in all ramifications", the governor requested from SEC. He said the state is presently developing three free trade zones simultaneously to encourage investors to the state.
On the criticism by some lawmakers, Daniel said the state Executive has followed due process and that the law backing the Executive was enacted in 1980, and was converted into the Ogun State law of 2007. He said: "We are operating within the framework of the constitution and we do not require the approval of the State House of Assembly. Capital market should be insulated from politics."
Chairman of the Board of SEC, Senator Udo Udoma said states should not depend only on equity market to raise money but should go into the bond market. "Once you meet the requirements, we will give you the approval. We will not bend any of our requirements. You have to make sure that you meet our requirements", Udoma said.
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