Nigerian Financial Institutions Remain Resilient To Economic Disruptions


Sunday, May 10, 2020 / 09.25AM / CIBN /  Header Image Credit: CBN

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The Deputy Governor, Financial System Stability, Central Bank of Nigeria, Mrs. Aishah Ahmad, FCIB, encouraged banks to maintain their commitment to sustainability in designing their business models to enable them to cope with disruptions and make a positive environmental and social impact in their quest to deliver value to their stakeholders.


She made the call while delivering her remarks at a Webinar, organized by the Centre for Financial Studies (CFS) of The Chartered Institute of Bankers of Nigeria (CIBN). Mrs. Ahmad maintained that Banks and other financial institutions can only survive disruptive events if they fully embrace sustainability principles stressing that this had become even more critical during periods of significant disruptions such as the current coronavirus pandemic (COVID-19) ravaging the world. According to her, though primarily a health crisis, the negative spillover effects on business and the economy are complex and pervasive, considerably slowing economic activities in most countries. 


The Webinar tagged CIBN Advocacy Dialogue Series 2.0 focused on the "Enhanced Sustainable Banking (ESB) Model in the Event of Major Economic and Business Disruptions'. Mrs. Ahmad told over eight hundred participants who connected to the programme through Zoom and YouTube that before the disruption caused by COVID-19 pandemic, financial services was undergoing significant evolution. The Deputy Governor of Central Bank of Nigeria was of the view that Banks have had to modify their business models to address changes caused by innovation, digitalization, new entrants by Fintechs, increasing regulation and changing needs and behavioural patterns of customers. 


These developments have triggered very aggressive changes in the financial services industry, introducing significant dynamism into the industry's value chain - changing mode the production, delivery and consumption of financial products and services, she asserted. She also stated that the Central Bank of Nigeria (CBN) has been at the forefront of entrenching sustainable banking principles in the Nigerian banking industry through the implementation of the Nigerian Sustainable Banking Principles (NSBP), which has formally been adopted by the CBN and 33 banks, discount houses and Development Finance Institutions.


In his intervention, Mr. Jibril Aku, FCIB, the Vice-Chairman, FMDQ Group, noted that the Nigerian economy was at the risk of another recession, he foresaw a new financial order Post-COVID 19. He observed that to stimulate economic growth and opportunities, policymakers, banking and capital market operators should undertake as a matter of urgency actions that would ensure business sustainability.


The Vice-Chairman FMDQ called on policymakers to recalibrate a national economic strategy to reduce dependence on the oil/gas sector, and boost non-oil sector growth. He equally called for increased investment in the health sector. He argued the need for investment in the digitization of education in public schools to prevent the collapse of the educational system while also calling for a unified and market-determined exchange rate regime.


He admonished the banking sector to ensure effective implementation of sustainable banking principles with a focus on economic, social and environmental and governance issues to boost reputation and investor confidence. While he saw the current situation as an opportunity for digital transformation and growth in banking offerings, Mr. Aku admonished the need to increase investments in cybersecurity to reduce fraud risk.


In conclusion,  Mr. Aku, who is also the Chairman of SunTrust Bank Limited, listed the imperatives for the capital market as follows;


  • Supporting the creation of new funding mechanisms to ensure economic recovery
  • Working with regulatory and market stakeholders to create incentives that support the growth of a green economy
  • Ensuring that listed companies report on compliance with environmental, social and corporate governance criteria.
  • Enhancing capacity building and knowledge enhancement in sustainable finance.


Mrs. Mosun Belo-Olusoga, HCIB, Former Chairman, Access Bank Plc, Mr. Simon Thompson, Chief Executive, Chartered Bankers Institute, UK and Mr. Ibrahim Salau, ERSM Nigeria Programme Coordinator, International Finance Corporation (IFC) were the other speakers at the event, which was moderated by Mr. Olufemi Awoyemi, FCA, Chairman, Proshare Nigeria Limited.


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