FOR the full benefits of the opportunities created with the reforms in the banking sector to crystallize, a number of lingering challenges in the real sector would need to be addressed. The most critical of these is the huge infrastructural deficit comprising of power and transportation'.This was the view of the Central Bank of Nigeria's (CBN) Governor, Lamido Sanusi, during the presentation of a paper on the recent banking reform and opportunities for real sector growth in Nigeria, at the fourth memorial lecture of the Clement Isong Foundation in Lagos, at the weekend.He however stated that though outcomes on financial sector reforms in Nigeria over the years which were aimed at repositioning financial institutions for effective mobilization and utilization of financial services for economic development have been mixed and some challenges still persist, concerted efforts are being made to overcome them.Sanusi who was represented by his Deputy, Suleiman Babarau, noted that the prospect of the real sector growth is bright given the various reforms in the financial sector aimed to unlock the credit potentials of deposit money banks, the lingering challenges of infrastructure deficit, has continued to limit the full realisation of the reforms for the sector.'What is clear however, is that the growth of credit to the real sector, though still relatively not very impressive, has been rising over time and it is expected to improve further as the effects of the current reforms permeate the banks. Similarly, the performance of the real sector in the face of the banking sector reforms has been impressive and we hope to improve funding to the sector', he added.On the way out for the nation's economy, Sanusi stressed that though still fragile, financial markets have recovered faster than expected, urging greater efforts in accelerating reforms in the other sectors of the economy and protect depositors'/shareholders fund.In addition, he added: the rebound in international commodity prices is expected to further support economic growth in commodity producing regions, including Nigeria.Sanusi said a major fall-out of the global financial crisis fostered the need to strengthen regulation and supervision, engage in better risk management practices in financial institutions and restore confidence in the financial system.According to him, the regulator is committed to enhancing the quality of banks through regulatory framework reform, risk based supervision, consumer protection, corporate governance and disclosure and transparency.'It is also working on establishing competitive banking industry structure, improved cost structure of banks through cost control and business process outsourcing, reliable and secure payment systems, greater financial inclusion, improving financial infrastructure, credit bureaus', he added.The various initiatives already taken are expected to strengthen the financial system and create an enabling environment for investment in the Nigerian economy, while ensuring stability in the Nigerian macroeconomic environment. Collectively, these are expected to create a climate for profitable real sector activities in the country, to take advantage of the potentially large domestic market in the West-African sub-region.
Click here to read full news..
