Banks To Face Recapitalization Exercise Before 2023, Emefiele

By CLEMENT NWOJI, Abuja

The banking sector is to embark on strategic plan of action for recapitalization of the banks before 2023.

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele gave the indication Monday while unfolding the apex bank’s “Five year Policy Thrust”.

Although, Emefiele did not say precisely what amount and the exact time the banks are expected to recapitalise, he said the current capital base of N25 billion pegged since 2004 had been wiped off by economic developments including inflation.

According to him, “A resilient and stable financial system is imperative for continued growth of our economy given the intermediation role that financial institutions play in supporting the needs of individuals and businesses.

“In the next five years, we intend to pursue a program of recapitalizing the Banking Industry so as to position Nigerian banks among the top 500 in the world.

“Banks will therefore be required to maintain higher level of capital, as well as liquid assets in order to reduce the impact of an economic crisis on the financial system.”

Emefiele further said the bank will aggressively implement its N500 billion facility aimed at supporting the growth of non-oil exports, which will help to improve non-oil export earnings.

“We will launch a Trade Monitoring System(TRMS) in October 2019, which is an automated system that will reduce the length of time required to process export documents from 1 week to 1 day.

“This measure will help support our efforts at improving our non-oil exports of goods and services. We will also work with our counterparts in the fiscal arm in supporting improved FDI flows to various sectors such as agriculture, manufacturing, insurance and infrastructure.

“These measures while supporting improved inflows into the country, will help to stabilize our exchange rate and build our external reserves”, the CBN Governor said.

Emefiele who disclosed that the External Reserve now stood at N45 billion as at June, said the bank intends to achieve double digit economic growth and single digit inflation within the next five years.

According to him, “Put succinctly, our priorities at the CBN over the next 5 years are the following; First, preserve domestic macroeconomic and financial stability; Second, foster the development of a robust payments system infrastructure that will increase access to finance for all Nigerians thereby raising the financial inclusion rate in the country; Third, continue to work with the Deposit Money Banks to improve access to credit for not only small holder farmers and MSMEs but also Consumer credit and mortgage facilities for bank customers.

“Fourth, grow our external reserves; and fifth, support efforts at diversifying the economy through our intervention programs in the agriculture and manufacturing sectors. We are confident that when implemented, these measures will help to insulate our economy from potential shocks in the global economy.”

He said that apex will target to achieve 95 Percent financial inclusion of eligible Nigerians by 2023 just as he disclosed that through the national collateral registry, over N400 billion worth of movable assets have been registered by MSMEs in the registry.

He said the amount would be tripled over the next three years and will embark on aggressive BVN enrolment to increase the current recorded number of 38 million to 100 million by 2023.