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Nigerian Banking System is Well Positioned To Support Economic Growth – Sanusi

By BusinessNews Staff on December 19, 2011

The banking system is stable and well-positioned to stimulate the growth and development of the economy, the Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, has said.

The Governor, who spoke at the end of the Third Bankers’ Committee yearly Retreat in Calabar, Cross Rivers State, said: “After two years of focused attention by the regulator and operators, the nation’s financial crisis is in the final lap of resolution.”

The CBN Governor said in 2012, the banking industry agenda will address outstanding issues relating to the restoration of the balance sheet of banks, entrenching corporate governance, avoiding build-up of non-performing loans and encouraging lending to the agricultural sector, amongst others.

The Bankers in a communiqué at the end of the retreat resolved to impact the economy more positively and also lauded President, Goodluck Ebele Jonathan, for his reform agenda at creating jobs and growing the economy.

Sanusi said the Bankers’ Committee, which has the CBN Governor, the Deputy Governors of the Central Bank, Managing Director of the Nigeria Deposit Insurance Corporation and the Chief Executive Officers of the deposit money banks, chose the theme: Financial system stability and implication for economic development, in recognition of the challenges facing the global and local financial system.

The Bankers’Committee engaged experts from within and outside Nigeria for the retreat to develop strategies for improving on the gains recorded in real sector development, ensuring sustained stability of the financial system as well as determine further opportunities for financial system intervention, Sanusi said.

He said the CBN is keen on increasing the impact of the banking system on the economy and by that is adopting a strategic approach to increase formal usage of financial services to 70 per cent from the current level of three per cent of the adult population of Nigerians.

“We affirm our commitment as bankers to a stable financial system for Nigeria and one that contributes to economic development,’’ Sanusi said. He stressed that the apex financial institution has taken proactive actions to address short, medium and long-term issues facing the banks.

On monetary and fiscal policy development, the Committee in the Communiqué advocated greater fiscal prudence and rationality in government expenditure. It asked for the establishment of the Sovereign Wealth Fund (SWF) and expressed support towards its operation.

Sanusi said the CBN will remain focused on its primary mandate of ensuring price stability, stressing that it has instituted a framework for enhanced monetary policy, transparency and accountability.

He said the apex bank will in the short-term “continue to implement a tight policy rate environment to support price stability.”

Fielding questions from journalists, the CBN Governor said that planned removal of petroleum subsidy will not trigger very high inflation rate in the country, “as only about 2 per cent rise is anticipated and that it is in the short term.”

Sanusi said “If inflation remains at about 10.5 per cent and when subsidy is removed, we expect it to be at about 12.5 per cent, which is just an addition of 2 per cent,” the CBN Governor said.

Sanusi Lamido