Recession: CBN asks banks to rescue the economy

December 10, 2016 Cynthia Charles BANKING

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The Central Bank of Nigeria has charged Deposit Money Banks in the country to work towards salvaging the distressed economy as the role of returning it to normalcy remains their responsibility owing to their financial intermediation activities that cut across all sectors.

Aside the intervention policies of the CBN, which are extended to the target populace through the banks, there is an added role for the financial institutions in evolving innovative approach to the nation’s development agenda, according to the apex bank.

The CBN Governor, Godwin Emefiele, who made the charge in his opening address at the 2016 Bankers’ Committee retreat in Lagos on Friday, noted that at a critical time in the country’s history, the emphasis on diversification and support for its achievement must be accorded priority by bankers.

At the retreat with the theme: ‘Economic Recovery: The Role of the Banking Sector’, the governor reiterated that banks must come up with innovative solutions that would enable the finance sector to play a key role in driving Nigeria’s growth and development.

The retreat, which is the eighth in the series, is an annual event where members of the Bankers’ Committee engage in strategic review of critical developments within the financial system and the economy.

Emefiele added, “The focus on economic recovery by bankers is timely, given the sustained external headwinds we are grappling with, triggered by several factors. Chief of such is the 70 per cent plus decline in the price of crude oil between June 2014 and June 2016.

“With over 90 per cent of our export revenues coming from the sale of crude oil, the drop in its prices along with the end of the quantitative easing programme in the United States has led to a huge impact on our economy, particularly in the foreign exchange market.”

Meanwhile, the Lagos State Governor, Mr. Akinwunmi Ambode, has charged banks to take their role of reviving the economy seriously.

Ambode, who was represented by the Deputy Governor at the opening of the retreat, Dr. Idiat Adebule, called for a change of orientation and support for policy instruments aimed at achieving the overall goal of reviving the economy.

“We must innovate now, because there is no option to get out of the recession. We must get it right too. The banking sector has a major role to play, because the survival of other sectors depends in part on sustainability and vibrancy of banks,” he said.

He gave an assurance that the suggestions of the bankers would be given due consideration by the government and its agencies to serve as a guide in policy formulation.

But noting that there is a paradigm shift, Emefiele said that emphasis was now on creating an enabling environment for a more diversified growth structure that was not dependent on the sale and production of one produce, crude oil.

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She is a prolific writer and has special interest on writing about business and opportunities. She can be contacted via cynthiaadigwe@financialwatchngr.com