Thursday, May 27, 2021 / 11:00 AM / by Straplan Advisory / Image Header Credit: Straplan Advisory
The National Financial Inclusion Strategy Governance
When the NFIS 2018 2020 was developed, there was little direction on the supervision and coordination of a digital economy encompassing infrastructure and services in Nigeria Hence, the NFIS was developed within the purview of the financial services sector, dominated by the banks. However, on 17th October 2019 President Muhammadu Buhari, GCFR, approved the re designation of the hitherto Federal Ministry of Communications as the Federal Ministry of Communications and Digital Economy FMoCDE and granted the minister the substantive role to drive Nigeria's digital economy policies.
Nigeria's Digital Economy strategy aspires to lay the foundation and framework for Nigeria's growing digital space, including payments and other digital financial services.
The Financial Inclusion Strategy (NFIS): Time for review, time to be tech-led
Increased use of mobile phones and the internet has raised financial inclusion levels globally Similarly in Nigeria, financial inclusion has risen over the last decade consistent with increased mobile phone usage and internet availability The country, however, fell short of its target of 80 financial inclusion by 2020 1 As of approximately 63 2 or 65 1 million adults had successfully been formally included and poverty remains a key challenge.
But there is a new target and it is even more ambitious According to the Governor of the Central Bank of Nigeria ( 2 the new target is to achieve 95 financial inclusion by 2024 However, emerging trends, particularly the combination of disruptions caused by Covid 19 and widening digital divide in the rural and underserved areas may have slowed down efforts and become the main threat s to the achievement of this goal in the short medium-term In essence, it is our opinion that it would be difficult for Nigeria to achieve this goal in the next three years without a critical review of the National Financial Inclusion Strategy (NFIS 2018 particularly the governance structure and its coordination in view of the overarching digital economy policy and strategy.
On the back of the priorities spelt out in the NFIS 2018 2020 that is, the need to put in place an effective and efficient structure the need to undertake changes from time to time in order to enhance governance coordination and unfolding socio-economic dynamics the need for a next phase that would be tech-led as against the current bank-led model is required to attain complete financial inclusion and alleviate poverty in Nigeria More so, the framework for a countrywide digitization has become the onus of the Ministry of Communications and Digital Economy
This report is to call out the need for the Financial Inclusion Secretariat (and stakeholders to re-evaluate and review coordination of the inclusion strategy for impact on the critical mass and as a pillar under the digital economy policy framework Digital Society and Emerging Technologies It is also instructive for the Nigerian Communications Commission (to take visionary steps in leading the implementation of national and sub national digital service infrastructure that would foster innovations to accelerate the achievement of 95 financial inclusion in the near term Key target and focus, of course, would be to increase income per capita, improve education and enhance the delivery of social welfare packages and poverty reduction strategies.