By Emma Ujah
The far-reaching interventions of the Central Bank of Nigeria (CBN) in various sectors saved the Nation’s economy from a deep post-COVID-19 crisis.
The Governor of the bank, Mr. Godwin Emefiele, disclosed this in his Keynote Address, at the 31st Seminar for Finance Correspondents & Business Editors, which opened, yesterday, in Enugu, Enugu State capital
In response to the COVID-19 crisis, the CBN, Mr. Emefiele said, introduced and implemented a suite of measures aimed at reducing the risk to financial stability, boosting demand and economic growth, ameliorating the impact of the pandemic on some sectors and obligors, such as the Oil & Gas, Manufacturing, Agriculture, pharmaceutical and hospitality sectors.
“Key among the measures taken were the approval of regulatory forbearance to banks to restructure their loans to severely affected sectors; provision of liquidity support to banks; provision of the COVID19 Targeted Credit Facilities (TCF) disbursed to individuals and households through the NIRSAL Microfinance Bank, several CBN intervention funds targeted at the real sector, and the mobilization of the private sector to contribute to the National response under the CACOVID Initiative.
“Other complementary measures included actions to enhance the resilience of the banking industry to the threat of cyber risk and deployment of an industry wide Cybersecurity Fusion Centre (C2FC) and Malware Information Sharing Platform (MISP) to address the growing cyber risk by providing a unified interface for cybersecurity intelligence sharing and enhanced incident response capabilities .
“No doubt, these measures have yielded the desired outcomes, as we begin to see the initial outline of an encouraging recovery given the recent data released by the National Bureau of Statistics with GDP growth put at 5% for the second quarter of 2021,” he said.
The governor added that despite the headwinds associated with the pandemic, the banking industry has, however, remained relatively resilient.
He said, “This is attested to by our financial indicators with the industry Capital Adequacy Ratio (CAR) and Liquidity Ratio (LR) standing at 15.2% and 41.7%, respectively, at end-July 2021. These are above the prescribed prudential minimum. Also, the Non-Performing Loan Ratio, which was 5.4% as at the same period was above the regulatory maximum of 5% by only 40 bps.”
Notwithstanding the above achievements, Mr. Emefiele said that the nation could not afford to rest its oars as the work was far from over.
He said that as a result of Nigeria’s robust payment system towards meeting the needs of households and businesses in Nigeria, a high level of confidence in the payment system attracted the sum of $500 million into firms operated by Nigerian founders between 2015 and 2020.
In spite of these gains, the CBN added that about 36 percent of adult Nigerians still did not have access to financial services.
“Improving access to finance for individuals and businesses through digital channels can help to improve financial inclusion, lower the cost of transactions, and increase the flow of credit to businesses,” he.said.
The past 14 years, Mr. Emefiele said that the Nigerian payment system has evolved significantly with extensive technological development to increase inclusion and ensure an easier and a more effective payment system.
The CBN boss noted that this development “calls for an Increased and intensive regulatory scrutiny on the part of regulators to proactively monitor developments and ensure the continuous safety and soundness of the financial ecosystem.
“It is therefore imperative that Regulators must keep pace with these exponential developments and leverage new knowledge and technology tools such as Regtech and Suptech to enhance the efficiency and effectiveness of their mandate.
“Operational risk increased due to the increased reliance on technology and third-party service providers during the period. Also, the risk of money laundering and cybercrimes have increased. There is also the elevated risk of unauthorized access to banks’ networks and data security breaches.”
The difference e-Naira “ll make
Mr. Emefiele also said that the CBN decided to introduce a Central Bank Digital Currency (CBDC) the eNaira, to help in attaining the goals of fostering greater inclusion using digital channels, supporting cross border payments for businesses and firms, as well as, providing a reliable channel for remittances inflows into the country.
He said, “With the deployment of the eNaira, Nigerians in remote areas can conduct financial activities using their digital, as well as, features on phone devices.
“Partnering with our stakeholders in the financial industry, I believe that more Nigerians will be financially included.”
Mr. Emefiele urged business editors and finance correspondents to play a critical role in public sensitsation towards the success of the CBN reform efforts as outlined in his five-year policy thrust unfolded in 2019.
Speaking as a panelist during the.coloquium, Prof of Capital Market, Uche Uwaleke , said that as desirous as the e-Naira might be, it would increase the vulnerability of the Nigerian payment system to cyber attacks.
He said he was, however , comforted that Bit Incoported has the competence to assist the CBN to undertake the digitization.
The university don said that Bit Incorporated might have “concentration risks” which the CBN needed to watch and that it could help if the CBN to engaged one or two more Fintech companies to play some roles, in case the main FinTech had issues.
Another panelist, Mr. Akeem Lawal of Interswitch said that it could be useful for a Nigerian FinTech company to be brought on board for the e-Naira.