Era of commercial banks folding up over ― CBN

Central Bank of Nigeria (CBN), on Monday, reassured Nigerians and corporate entities that the era of commercial banks folding up in the country is over.

Speaking at a one-day interactive enlightenment programme with stakeholders in labour and civil society organizations in Ilorin on five-year policy thrust of the CBN, director, corporate communication department of the apex body, Mr Osita Nwanisobi, said that the feat was achieved due to stability, strength and zero-resilience that the apex bank had put in place in the country’s financial system.

The CBN official, who said that the country’s gross domestic product (GDP) improved from minus 6.10 per cent by the third quarter of 2020 to 4.03 per cent in the third quarter of 2021, attributed the achievement to the CBN’s interventions on the health sector and N1 trillion interventions in the manufacturing sector.

“In the aftermath of the global health crisis (COVID-19), Nigeria just like all other economies went into recession. The CBN mitigated the adverse effect of the pandemic by intervening in the household economy, small and medium scale enterprises (SMEs) and businesses through reduction of interest rate from nine per cent to five per cent, an extension of moratorium by an initial period of one year and later by another one year: giving of forbearance to banks to restructure on the terms of facilities that they had given to companies and SMEs.

“Others are interventions on health, home financing and solar energy. Currently, CBN is intervening in the tertiary institutions’ entrepreneurship scheme (TIES). All of these are geared towards mitigating the impact of COVID-19 and to slow down its impact on the global economy.

“As a result, we have recorded significant recovery on the economy. By the second quarter of 2020, as a result of COVID-19, Nigeria’s economy slipped into a negative trajectory. Our GDP growth was minus 6.10 per cent. By the third quarter of the same year, the GDP was minus 3.62 per cent, but by the fourth quarter, the economy recorded a marginal growth of 0.10 per cent.

“In the first quarter of 2021, the GDP moved to 0.51 per cent, by the second quarter it grew to 5.10 per cent and by third quarter of the same 2021, the GDP grew by 4.03 per cent.

“When we relate this to the five years policy thrust of the CBN Governor, Mr Godwin Emefiele, we will gradually begin to see the growth trajectory of the economy.

“Before then, the inflation rate began to decline from 16.3 per cent to 15.99 per cent. Food inflation was also 9 per cent trending downward. That is not where we want it to be, but that is also progress considering what happened.”

Speaking on Nigeria’s financial stability, he put “the capital adequacy ratio at 15.2 per cent and liquidity ratio at 41.2 per cent. “Both at prudential limits.”

The CBN’s spokesperson said that the country’s non-performing loans moved from 5.7 per cent to 5.3 per cent, adding that “I am giving you these numbers to show that the country’s financial system is strong, stable and zero resilience”, he said.

The apex bank said that the need to partner with stakeholders on measures aimed at growing the nation’s economy became expedient, adding that it would take collective responsibility of every stakeholder, aside from functions of the CBN, to improve the nation’s economy.

“If we all put our heads, our hands together, we’ll grow our economy sustainably.

The CBN official, who also advised Nigerians to be more careful with their financial documents or passwords, said that hackers find it easy to tamper with accounts whose owners had carelessly handled their related information.

“Individual is the greatest security that one should have. If you leave your password or certain private documents or information and allow people to know, then it’s a lot easy for hackers to tamper with your bank account. However, we have put in place infrastructure to guard against any manner of hacking and that infrastructure will continually be upgraded,” he said.

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Era of commercial banks folding up over ― CBN