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CBN targets world model central bank by 2015

By BusinessNews Staff on February 15, 2014

The Central Bank of Nigeria (CBN) has said that its vision is to be a model for central bank around the world by 2015.
The Governor of CBN, Mr. Lamido Sanusi, who disclosed this at the Udo Udoma & Belo-Osagie (UUBO) 30th anniversary lecture, titled: “What Next” said “I remember when we were having the debate of a model for central banks in Africa and the world, and I said to them, what is it about that the Nigeria’s central bank cannot be a benchmark of central banking.”

The CBN Governor listed models that it had mapped out to execute, to include: The Economic Policy Directorate for monitoring authority with the objective of ensuring high stability that is conceived in economic growth; The Financial System Stability with the objective of promoting sound financial system; and Operation Directorate, to provide a credible reliable and efficient payment system.

“And the idea behind the models was to achieve a monetary policy objective. “You have to compete with the other low inflation economies in the world, which is why we have to beat inflation down from 15.6 percent in 2009 to between seven and eight percent. We wanted to get away from the day when people will wake up and see that the banking system has already collapsed” he added.

“But more importantly, we wanted people to understand that even if a bank will go under, there was the central bank that will protect deposits which is why throughout the crisis and we’ve seen that everywhere, throughout the world’s banking crisis, Nigeria is the only country that had a banking crisis on the scale where not a single depositor or creditor lost a single penny in the bank” Sanusi said.

Lamenting on the 2007 and 2009 crisis of the Nigerian Stock Exchange (NSE) and the banks, he said, “Can you imagine in 2009 the capital market has crashed by 70 percent, in 2007, the NSE was the best performing stock exchange in the world. In 2009, it was the worst performing stock exchange in the world, there has been a big bubble which has burst, banks were crying over fifty million and hundred million naira, inter-bank rate were so high in the inter-bank market.

For the banks, he stated, “What we discovered when we went into the banks was much, much bigger than what we thought. We discovered that the total amount taken by the CEO’s was equivalent to what we were distributing monthly into the federations account. “If you go back to September 2010, we distributed 236 billion to our federation and at the end of that month, the balances of the account associated with one bank were 235 billion to know how bad it was and it was so bad that every member of committee of governors shared tears.”

Meanwhile, Senator Udo Udoma, Founding Partner, UUBO, added that Nigeria will only get better if only, necessities are put in their proper place.
Udoma said, “Am very positive about Nigeria, we have a lot of entrepreneurial people, who are hardworking, what we need in this country is our infrastructural system, we need good transport, good power system, once we can fix this, this country will pick up, already, we are about to fix power, we have fix telecommunication, if we have good rail system and good road we will soar in this country.”

[Vanguard]

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