Nigerian Central Bank: new agenda for new governor

In an interview granted to Financial Times, the new governor of Nigerian central bank, Mallam Lamido Sanusi, set out his plan for the Nigerian banking sector.

He was made the governor of Nigerian apex bank early this month, and the appointment triggered a big argument between those who supported the ideas of his predecessor, Chukwuma Soludo, and those in opposition.

In one of his earliest public statement, the new CBN governor sent a word of advice to President Umaru Musa Yar’adua whom the realisation of his self-assigned goal, the Seven Points Agenda is becoming a complicated project.

“The Seven Point Agenda of President Umaru Musa Yar’adua’s administration should be “prioritised” to two items, power supply and critical infrastructure. Until we address the infrastructure problem in this country we will not even begin to solve our problems. We could focus on two or three things and finish them within the next four years. That would be a far more effective contribution to this country than focusing on the seven…”

Speaking to Financial Times in the middle of last week, the governor said that the market would understand if the problem facing it is acknowledged and there are professional and diligent move to resolve them. Going further, he added:

“In my view, the number of banks that need serious help is relatively small. Unfortunately a few of them might be systemically important, and therefore how it is handled in terms of communication, how it is handled in terms of prioritization at this stage is extremely important so that in addressing the problem you don’t create a bigger one.”

Speaking about the foreign banks being involved in the Nigerian banking sector, he told Matthew Green, the Financial Times West Africa correspondent:

“I do hope they will be interested, and I do hope they will understand that the economic fundamentals remain very strong. Apart from this problem with the financial system, oil prices have turned, the government is clearly re-energizing itself. There is progress in key areas. Inflation is coming down. We are going to see what we can do about having low interest rates as much as possible and encourage the real sector to grow.”

The central bank of Nigeria is presently not likely to support a foreign bank owning more than 10 percent of a top tier Nigerian bank. That is what the new governor is trying to change in line with his new banking regulation and investment friendly.

Concluding with transparency, he said the market should trust him that he would do what he has promised.

 

Ewanfoh Obehi Peter

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