What banking analysts and economists expect from whoever will take the mantle as governor of Central Bank of Nigeria (CBN) from Sanusi Lamido Sanusi when he steps down as governor of the apex bank in June 2014, are continuity in the implementation of reforms, independence of the CBN, among others.
Sanusi’s policies have been very successful in spurring increased lending to the real sector, catalysing privatisation of the power sector by developing banks capacity to lend to the sector and keeping inflation and exchange rate under control. Most importantly, by averting a long drawn out crisis with the intervention in 2009, the creation of Asset Management Corporation of Nigeria (AMCON) and introduction of improved governance policies and sustainability principles, the banking industry is much healthier and depositors funds are safer, Ladi Balogun, CEO, First City Monument Bank (FCMB) plc, and Chukwuka Monye, managing partner, Ciuci Consulting, noted recently.
According to Balogun, for the first time in decades, the stability has allowed businesses to plan and invest large amounts in Nigeria. We are seeing less capital flight and more local investment in real sector and job creation. “For these gains to be sustained post Sanusi, we need continuity. We need the continued independence of the CBN. Hence, much will depend on the choice of his successor,” he said.
Akpan Ekpo, director-general, West African Institute for Financial and Economic Management (WAIFEM), was optimistic that the exit of the present governor of the CBN would not pose any threat to the banking industry; most of the issues surrounding the relationship between the apex bank and the banking industry were routine matters and would continue after the tenure of the present governor.
However, he said in the short term, there would be a kind of wait-and-see approach as regards the direction a new governor might wish to take.
“The banking sector would be curious to see the trend of discussions and decisions in the first two meetings of the Monetary Policy Committee of the CBN. Governor Sanusi stressed financial stability by insisting that banks consider the risk variable as fundamental in their decision matrix. It would be necessary to strengthen the examination and supervision of banks as well cement on continuous basis corporate governance in the industry,” Akpan told BusinessDay.
Monye said continuity in the implementation of such banking reforms would further strengthen the apex bank’s financial intermediation processes, and improve the interventions of both the central and commercial banks in relevant and critical sectors of the economy.
For example, a concern being raised by many analysts globally is that as the US economy improves, many American investors who have invested their funds in different emerging economies including Nigeria may begin to withdraw their funds and invest back into the US economy. While such potential issue should be a concern of the capital markets operator, they open more opportunities for banks to partner with these investors in critical areas of the economy, and the CBN could provide some guidance here, he said.
By: HOPE MOSES-ASHIKE
