As Nigerian banking industry leads Africa into the 21st Century

The declaration last week by the Central Bank of Nigeria Governor, Chukwuma Soludo, that Nigerian banks are doing better than South African banks was never a fluke afterall. It was a pronouncement from one of the internationally respected economic minds in whom the BrittonWoods institutions have so much confidence.

In coming out with that verdict, the CBN boss must have been convinced that the imbalance between the two countries financial industries have been corrected by the rapid progress the Nigerian market recorded within the last two years.

To practically demonstrate what he meant by that statement, the governor noted it has taken Nigerian banking industry only three years to achieve what took South Africa about 20 years to attain.

Besides, the amount of Foreign Direct Investment that came into the country, through the 2005 consolidation programme, the governor observed that the reform has led to the establishment of over 600 additional bank branches into the industry, which according to him was a record achievement.

Prior to the 2005 consolidation programme, the total branch network of the 97 bank was about 3200. This has, however, grown to 3866 following the massive network expansion drive of the 25 banks operating in the country.

The latest turn of events in the industry has eventually placed Nigerian banking sector as one of the fastest growing banking industries in the world, This development comes at a time when the government and indeed the Central Bank of Nigeria were working out modalities to enable Nigerian economy join the league of the 20 largest in the world by 2020. However, international financial analysts are putting it beyond merely becoming the largest economy but are rather seeing Nigeria banking industry dictating the pace for the entire African continent in the 21st Century financial services age.

Today, Nigerian banks have gone from opening branches in the West African Sub-region to arriving on the world stage as demonstrated by the recent Roadshow at the London and New York Stock Exchanges. Most analysts see these developments as clear signals to the entire world that the country is ready to take on the global financial services market by storm in the next few years.

From all indications, Nigeria has become a foremost investment destination and banks have a strategic role to play in the emerging dispensation. Over the last two years, as noted by Professor Soludo, foreign investment in Nigeria has exceeded the $7billion mark and would continued to build up gradually as the Financial System Strategy gets underway.

Already, there are serious effort by the financial community to set up an International Financial Service Centre, in Lekki, Lagos. As the commercial nerve centre of Nigeria and indeed the West Africa sub-region, the choice of Lagos is symbolic as it is at the heart of the strategy to emphatically make Nigeria the first choice financial service centre in Africa.

The creation of the Lekki Financial Services Corridor, is therefore a key factor in the whole Financial system strategy. It is expected to make Nigeria, Africa’s financial hub by 2020. The Central Bank governor said the area will be specially quarantined and developed as an international financial centre where people doing business will not be able to differentiate from New York or London Financial Centres.

When established,, financial services will be conducted seamlessly within the area which will have its own special, legal and regulatory framework guiding business operations.

This seems to be the overriding objective of the three-day International conference in Abuja.

It was among other things intended to fashion out the framework for the development of SME financing in Nigeria, that needs its huge population of SMEs businesses to drive the economy.

Again, other issues like the pension, insurance, banking and financial education skill acquisitions were also discussed at the conference. All sectors of the Nigerian financial sector were adequately represented at the international conference.

Already, many of Nigerian banks our opening branches in many West Africa countries, and they extending to several other African countries, and within the next three years, according to the governor of Central bank of Nigeria, Prof. Chukwuma Soludo, Nigerian banks will have out post branches in not less in 20 African countries.

In tandem with the overall objective, all these are being done to harmonise the regulatory framework around what will enable our people play the kind of roles they are expected to play in the emerging Africa’s financial service age.

The Nigerian economy must, according to Soludo, be growing at 12 per cent rate per annum. To achieve this, the economic base must be diversified away from primary commodities, this is more so because even after 5 decades of independence, our economy is still largely dependent on primary commodities of oil, gas and other natural resources, agriculture and solid minerals.

It is the collective aspiration of Nigerians that we should diversify our economic base away from these primary commodities by exploiting the opportunities offered by the primary commodities, then move on to the next stage of our development which is in the area of industry, manufacturing and financial services. This economy has all the resources to move it into the next stage, in terms of human resources and natural resources we have what it takes.

What remains is in terms of skills and financial growth; we have the fifth largest reserve in the world. This is in addition to what we already have, which means the 12 per cent growth rate needed to move the economy to the next stage is not beyond the reach of Nigeria and Nigerians.

At a population growth rate of 3 per cent, Nigeria has one of the fastest population growth rates in the world; most countries of the world have a figure far below this. Since we know that our population will be growing rapidly, it is in this context that we must also increase the income base of the economy with more rapidity than the rate of the growth rate of the population.

The buoyancy of the Nigerian Stock Exchange is not possible without a strong buoyant banking system, much of the trading going on in there are financed by banks. Our capital market is one of the most profitable in the world. It is only in Nigeria that you can get a 700 per cent rate of return on stock.

"We need a strategy that can move all our economic sectors in tandem with a holistic framework and common goal with and end in sight that by 2020, Nigeria will be Africa financial hub, if you want to be the largest economy in Africa, one of the largest in the world then your financial system must move in tandem with this vision."

'Nigeria contributes N1.8bn annually to AU'


ABUJA — NIGERIA contributes about N1.8 billion ($24 million) annually to African Union (AU) for the unity of African Nation, the Permanent Secretary, Ministry of Foreign Affairs Ambassador Hakeem Baba-Ahmed has said.

Briefing newsmen in Abuja on the forthcoming AU summit that will take place in Accra Ghana next week, Amb. Ahmed said that the contribution is the investment Nigeria made towards the unity of Africa and peace keeping in the sub-region.

His words, “our annual contribution to AU is about $24 million dollars that transcends to about N1.8 billion.


“This gives Nigeria greater sense of security and comfort to relate with the rest of other Africans. It re-enforces our position as a leader in Africa .

“ It enforces Nigeria capacity to actually advice in the areas of conflicts and re-enforces our negotiating hands when we have to sit across other African countries and above all it places Nigeria in situation where it can sit with other African Countries that are unfortunate enough not to speak.


He pointed out that Nigeria has lots of benefit as a member of AU nation, adding that it will make Nigeria a strong Africa, a prosperous Africa, and African where Africans tell each other what is wrong and what is not.


“We shield African from external aggregation that have no place and no business in today’s world, and above all we secure for Nigeria an area far wider than we are all into, where we can trade and live in peace”, he said.

The creation of the[b] Lekki Financial Services Corri[/b]dor, is therefore a key factor in the whole Financial system strategy. It is expected to make Nigeria, Africa’s financial hub by 2020. The Central Bank governor said the area will be specially quarantined and developed as an international financial centre where people doing business will not be able to differentiate from New York or London Financial Centres.

kokoA:

Trust our big men. Helicopter shuttles have already commenced between ikeja and victoria island. But what of the poor folks that will be employed there?

degoat:

Wow, it is nice to know that Nigeria at her lowest point is still able to flex muscle. I will never count this country out. I still think Nigeria is heading toward greatness and very soon the rest of African countries will start to look up to Nigeria once again.
With excellent leadership, Nigeria as a country is untouchable.
Incredible Topic.

GNature:

@jockey112

Thanks for sharing the LBS ranking with us. I am so happy for the school's accomplishment. I have said before that the establishiment of private higher institutions of learning is going to be a plus for Nigeria. The best is yet to come.