Vice President Yemi Osinbajo says signing of the African Continental Free Trade Agreement (AfCFTA) offers Nigeria great opportunities to extend its banking and financial services across Africa.
Osinbajo made this submission while addressing the 12th Annual Banking and Finance Conference 2019 of the Chartered Institute of Bankers (CIBN) in Abuja on Tuesday.
The two-day conference has the theme, “The Future of the Nigerian Banking Industry-360.”
Osinbajo said there was also need for Nigeria to boost its exports, which could not be achieved without improving infrastructure.
He said: “With the signing by the President of the African Continental Free Agreement, there are great opportunities and challenges.
“We have great opportunities to extend the reach of our banking and financial services across Africa where we are already making waves, and export more where we are already exporting, especially in fast moving goods, cement and now fintech.
“However, we must improve infrastructure to expand our manufacturing base, and produce cheaper; this is crucial because we are also the target market for all Africa.
“We are already faced with the threat of smuggling; we will now have to contend with the threat of dumping.
“This is why the current stage of negotiations on the AfCFTA is crucial; I think the sum and substance of what I am saying is that our financial services sector now has to redefine itself.”
The vice president said that concerted efforts needed to be made to lend to Micro, Small and Medium Enterprises (MSMEs) and the entire real sector.
He said that the CBN had already in partnership with some banks successfully given loans to almost one million farmers under the Anchor Borrowers Programme but the need was far greater.
According to him, there are a series of measures the Federal Government have taken to unlock lending to critical, labour intensive sectors of the economy.
“In Agriculture, we have seen how the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has given the banking industry greater confidence to unlock new capital for Agropreneurs by de-risking value chains across the nation.
“The immediate dividend of enhanced agricultural productivity is the sharp increase in the population of employed and banked Nigerians while reducing our foreign exchange expenditure on food imports.
“This can now be expended on our extensive infrastructural development and social investment programmes for further job creation and enhanced financial inclusion,” he said.
According to him, government is leveraging on the success, knowledge and experience of our work in NIRSAL to fundamentally reform the Solid Minerals Development Fund (SMDF).
“This is to de-risk value chains in the Solid Minerals sector with a Risk-Sharing mechanism to secure lending from the banking sector for private capital to in-flow and build new allied industries.
“We have been in discussions with PENCOM on derisking pension funds to enable lending for infrastructure development,” he said.
The vice president said that financial inclusion was key to realising President Muhammadu Buhari’s promise to lift 100 million people out of poverty in 10 years.
He said that the journey of lifting 100 million Nigerians out of poverty started with collaboration with the Bank of Industry to deliver the Government Enterprises and Empowerment Programme (GEEP)–Tradermoni and Marketmoni.
Osinbajo said that by providing microcredit to almost two million petty traders, BoI had brought the huge bottom of the pyramid into the formal financial system.
He said that after emerging from a recession Nigeria had attained a reasonable measure of macroeconomic stability.
Earlier, CIBN’s President, Uche Olowu, said that the conference was symbolic and significant to CIBN and Nigeria in two great ways’.
He said it marked the 125th Anniversary of the emergence of banking in Nigeria.
Olowu said it was also coming exactly a week after the 23rd World Conference on Banking Institutes hosted by the London Institute of Banking and Finance.
Also speaking, CBN President, Godwin Emefiele, said that 21st century banking was digital and had come to stay in Nigeria.
Represented by Dr. Joseph Nnanna, Deputy Governor, Economic Policy Directorate, CBN, Emefiele urged the Nigerian banking system to be alive to its responsibility as the days of arm-chair banking were over.
