Nigeria’s Central Bank to establish NIFC for Lagos to Join London, New York, Singapore as Financial Hub

Nigeria’s Central Bank to establish NIFC for Lagos to Join  London, New York, Singapore as Financial Hub

The Central Bank of Nigeria (CBN) is taking another bold step to ensure that Nigerian banks continue on the existing trajectory of growth and resilience, and improve their operations to meet global best standards.

On Tuesday, the CBN governor Godwin Emefiele announced during the 14th Annual Banking & Finance Conference, organized by the Chartered Institute of Bankers of Nigeria (CIBN), that the apex bank will establish the Nigerian International Financial Centre (NIFC) in the next 12 months, ThisDay reports.

During the conference which was entitled: “Recovery, Inclusion and Transformation: The role of Banking and Finance”, Emefiele said the NIFC will act as an international gateway for capital and investments, driven by technology and payment system infrastructure.

He said the NIFC will curate local and international banks to make them global champions, and will be a 24/7 financial centre that will complement London, New York and Singapore financial centers and enable an acceleration of home grown initiatives such as the Infracorp plc, the N15 Trillion infrastructure fund which would be launched in October.

In addition, the governor said the new financial hub would also complement initiatives on the Nigerian Commodity exchange and the National Theatre creative hubs for Nigerian youths as well as the E-naira project which will also debut in October.

Emefiele explained that the NIFC would take advantage of existing laws such as the BOFIA 2020, NEPZA and other CBN regulations to create a fully global investment and financial hub where monies, ideas, and technology will move freely without hindrance.

The apex bank head used the opportunity to reflect on the initiatives taken so far to ensure growth and stability in Nigeria’s banking industry. He said the CBN worked to protect the interest of depositors by ensuring that banks made adequate capital provisions to cover for unexpected losses.

“We also enabled banks to restructure loans granted to individuals and businesses significantly affected by the pandemic. Our banks also demonstrated exceptional resilience by putting in place business continuity plans, along with the deployment of digital channels, which ensured that the provision of financial services to customers was not disrupted by the COVID-19 pandemic.

“We are delighted that these measures have paid off. Indeed, key indicators in the banking sector continue to reflect that our banking sector remains strong, resilient, and healthy. Capital Adequacy Ratio and Liquidity Ratio in the banking sector have remained above the prudential limits at 15.5 and 41.3 percent, respectively.

“The Non-Performing Loan Ratio of the Banking Industry in July 2021 stood at 5.4 percent reflecting continued improvements from 6 percent in September 2020. Our banking sector remains well positioned to support the recovery efforts of the fiscal and monetary authorities,” he said, adding that Nigerian banks have become not only strong and resilient, but have also carved a good niche in the world.

Over the past 10 years, the Nigerian banking industry has undergone a series of policy changes geared toward consolidation. The result has been impressive with ills such as liquidation, which used to be a constant feature in the sector, fully eliminated.

However, while the industry has shown growth and resilience over the years, adapting to technology advancement remains a struggle. In the age of cryptocurrency and fintech boom, which is increasingly posing a threat to traditional banking, the central bank is working to bridge the technology gap with initiatives such as the NIFC.

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