The Director of Banking Supervision, Central Bank of Nigeria (CBN), Mr Ahmed Abdullahi has said that the economy would record significant improvement by the third quarter of the year, citing stability in the foreign exchange market which has achieved convergence in the official and parallel markets.
Abdullahi told newsmen after the 323rd Bankers’ Committee meeting in Lagos today
that confidence in the economy is gradually building up which had shown in the downward trend in the inflation rate and the positive development recorded at the capital market.
The Committee noted with delight the improvement in economy in recent times, but observed that the economy is still in the negative but the size of the negative growth has reduced hoped that by the end of the end of the third quarter there will be positive growth as there are a number of indices that are pointing toward that.
The meeting observed that Inflation is trending downwards as it is about 16.25 per cent from 18 per cent that it was while the exchange rate has largely stabilised, as there is convergence at both the FX, Importer and Exporter window as well as the BDCs’ rate.
The director added that confidence was increasingly building in the economy saying that was because of the improvement in oil production and oil price.
“The economy will remain robust now that the upward growth in most of the sectors of the economy.
“The FX window in the last 6 weeks has recorded over $2 billion which has been reregistered as inflow and that has helped in stabilising the market.
“With other windows, we have seen activities that have helped in building confidence in the market generally.
The Managing Director of the Standard Chartered Banks, Bola Adesola gave an update on the agriculture and small enterprise equity fund.
Adesola said that the equity fund was a decision held after the last Bankers’ Committee’s retreat last month with a commitment by banks to support agriculture and SMEs in a sustainable way.
She said, “After the audited results of the banks have been published we all contributed five percent of our Profit After Tax (PAT) to a fund in CBN towards contributing equity to agriculture, small and medium enterprises.
“As you know, many companies cannot just survive on debt because of the cost of debt and so long term capital is required to catalyse the growth of SMEs and make them more viable and sustainable.”
She also disclosed that there had been a contribution of N26 billion in the equity fund while the committee was still working on the framework as well as looking at partnerships.
“ We are looking at co-investing with private equity firms as well and the objective is to
catalyse growth in SMEs to ease access to finance to build capacity in the agriculture and SME sector to create jobs and ultimately to improve prosperity.
“The economic development of the banker’s committee is working with development finance and legal department and supervision in the CBN.
“We also want to ensure that we have the right governance around the equity fund and it is our own contribution to economic growth and prosperity in the country,” she added.
Also, Mr Nnamdi Okonkwo, Managing Director of Fidelity Bank said there was also discussions on issues that could jeopardise financial inclusion and anything that would stop people from being included in the formal financial sector.
“We will work o ensure that that bottleneck is removed. One key issue that came up today is the issue of customers of microfinance banks, MFBs who do not yet have their Biometric Verification Numbers registered, BVN. Some feedback that the committee got was that some banks charge customers when they try to register. So the bank’s committee agreed today that mfbs customers can walk into any bank and register their BVN free of charge, to make sure that we don’t discourage people from being financially included.