By PETER EGWUATU

The macroeconomic stability achieved in the year 2012 was largely attributable to the monetary policies of the Central Bank of Nigeria (CBN) and the collaboration of the Financial Services Regulatory Coordinating Committee (FSRCC) toward implementing various reforms initiatives to boosting the financial industry.

Analysts believe that the three key economic indicators: exchange rate, interest rate and inflation and money supply were managed and regulated for meaningful impact on the overall economy.

Specifically, the banking industry witnessed unprecedented activities during the year under review.  The activities were anchored on the reform agenda introduced in the sector in 2004 by the apex bank and was later streamlined into four pillars by the incumbent governor, Lamido Sanusi.

The four pillars centred on enhancing quality of banks; establishing financial stability; enabling healthy financial sector evolution and ensuring that the financial sector contributes to the real economy.

The banking sector was expected to effectively play its actual role in intermediation and for the banks to be among global players in the international financial markets. The policy thrust at inception, was to grow the banks and position them to play pivotal roles in driving development across the sectors of the economy. The reform is also targeted at making the system more effective and strengthening its growth potentials.

The CBN’s cashless initiatives

The first major policy in the year under review was the Cashless Lagos, the pilot project of the Cashless policy enunciated by the Bankers’ Committee and CBN. The policy was aimed at moving away from cash-based economy to electronic payment system. Its other objectives include addressing currency management challenges in the country, as well as enhancing the national payments system. This is against the backdrop of the direct cost of cash management to the banking industry which was estimated at N192 billion by the end of 2012.

CBN Gov Lamido Sanusi

The policy stipulates that to withdraw more than N500,000 (for individual account holders) and more than N3,000,000 (for corporate account holders), there will be a transaction cost. To ensure the success of the policy, the apex bank and banks embarked on promoting the various e-payment channels such as the Automated Teller Machines (ATMs); Point of Sales (PoS) terminals, mobile banking technology and internet banking, among others.

Analysts believe significant achievements are being recorded in this regard as many Nigerians have now embraced the e-payment channels to transact business.

Financial inclusion initiates

Worth mentioning is the financial inclusion strategy of the CBN. The unbanked and the under-banked are now being attracted to the banking landscape. The licensing of seven mobile money operators in September is further assisting in this regard. The Bankers’ Committee did pick Borno State to pilot financial inclusion. The idea is to ensure that as many Nigerians as possible have access to financial resources..

Currency Restructuring

The CBN during the year under review initiated move to restructure the currency in its programme tagged Project “CURE” which would have seen the introduction of higher denomination of N5, 000. It was met with stiff opposition from all strata of the society as many claimed it would result to inflation.  Also, many people talked about the cost implication, stressing that the money it would cost the nation to restructure the currency was too large and could be used for other meaningful things that will transform the life of the citizens.

It took President Goodluck Jonathan‘s intervention to put the project on hold and douse the attendant tension.

According to Lamido, under the new structure, the existing denomination of N50, N100, and N200, N500 and N1000 will be redesigned with new security features, the lower notes of N5, N10 and N20 will be converted to coins. The new notes would have carried the images of three women, Margaret Ekpo, Funmilayo Kuti and Hajiya Gambo Sawaba.

AMCON Performance

AMCON during the course of the year reported a loss after tax of N2.37trillion three years after it was set up to absorb the bad loans of banks. It affirmed that the three banks it acquired which include Mainstreet , Keystone and Enterprise banks would be sold in the second quarter of 2014.

Also early in the year, Jaiz Bank the first fully licensed non-interest bank in the country started business.

The other industry regulator, Nigerian Deposit Insurance Corporation (NDIC) in collaboration with the apex bank embarked on series of joint examination of the banks with a view to ensuring that banks keep to corporate governance and ethics.

Analysts /Stakeholders Opinion

The analysts from FBN Capital have stated that there are compelling reasons to expect Nigeria to take some large steps forward.

According to them, inflation and interest rates are set to fall; the banks have substantial lending capacity; the CBN has a proven formula to hold the naira exchange rate provided that the oil price obliges; and mobile money could take off.

We would add that we are mid-term in the electoral cycle, and that by 2014 the reform programme will be vulnerable to the distraction of the polls the following year. That distraction will be the greater for the uncertainty surrounding the president’s own electoral intentions.

The National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir, Sunny Nwosu, the CBN does not exist.

According to him, the policies of the apex bank are suffocating the industry’s stakeholders, stressing that Nigerians should expect worse coming year.

In his submission, Chief Executive Officer, Biodun Adedipe Consult, of Dr. Biodun Adedipe, affirmed there is a natural tendency for people to resist change, particularly where they have perceived misgivings about either the process or the driver of the change, which they considered a threat to their vested interests. Adedipe said the industry was moving in the right direction.