To position Nigeria to take full advantage of the opportunities offered by the African Continental Free Trade Area (AfCFTA) Agreement, the Central Bank of Nigeria (CBN) on Monday began preparing the Nigerian financial sector to build its capacity to participate fully.
The apex bank’s Deputy Governor in charge of Economic Policy Directorate, Kingsley Obiora, said the Town Hall meeting organized via a webinar was to underscore the need for the sector to be repositioned to play a key role in reaping the benefits provided in the agreement.
Obiora assured that the CBN would provide the needed support to stakeholders in the country’s financial sector to ensure that optimal benefits were reaped from the AfCFTA agreement.
The Director-General, Nigerian Office of Trade Negotiations (NOTN), Yonov Agah, assured that his office would also work with all stakeholders in the area of negotiations, to facilitate the maximization of benefits of the agreement.
“On the expectations of what needs to be done, if you have any issue with negotiations, we can work with you. You need to negotiate amongst yourselves first, before going continental. We will work with you and guide you to maximize the benefits,” he said.
CBN’s Director, Banking Supervision Department, Haruna Mustafa, said the banking sector was expected to play a pivotal role in the implementation of the AfCFTA agreement.
Haruna assured that Nigerian banks were well-positioned to play that important role within a fast-growing continental population.
“The African population is projected at 1.7 billion by 2030. This implies that intra-African trade will increase astronomically. The AfCFTA agreement will lift more than 30 million Africans out of poverty. The numbers mean a lot of opportunities for banks, which need to be well-capitalized. As we speak, the industry is well-capitalized,” he said.
He urged financial institutions to operate with the highest professional standards, to win the confidence of other stakeholders.
Director, Other Financial Institutions (OFI) Department, Bello Hassan, cited Development Finance Institutions, Discount Houses, Finance Companies, Holding Companies, Merchant Banks and Micro-finance Banks, as engine rooms for economic growth.
“Some of the OFIs are already undergoing a recapitalization drive to strengthen them to be more competitive,” he said.
He urged the OFIs to clean up their books, adopt International Financial Reporting Standards and improve their internal control systems.
“They should train their staff and rejig their business practices. They should continue to engage other stakeholders, and support small businesses to take full advantage of AfCFTA”, he said.
With AfCFTA and the support of these financial institutions, he said Micro, Small and Medium Enterprises (MSMEs) would be empowered to produce goods and services for export.
“We expect an increase in trade in the continent and MSMEs should be able to produce goods and services for export”, Hassan stressed.
Director, CBN’s Trade and Exchange Department, Ozoemena Nnaji, however, said that a lot of bottlenecks needed to be removed for Nigeria to reap maximum benefits from the AfCFTA agreement.
In particular, she identified the need to address the issue of logistics at the existing ports of entry as well as the opening up of additional ports to accommodate the volume of expected trans-continental trade.
“We should also look at attracting more foreign direct investment into critical sectors of the economy. We should improve on the manufacturing sector to boost economic diversification agenda.
“Nigeria is the second largest exporter on the African continent, accounting for about 19 percent of all exports. We should, therefore, work to improve on that,” she said.
Director, Monetary Policy Department of the CBN, Hassan Mahmoud, noted that the meeting was an avenue to brainstorm on ways to enhance the capacity of the financial sector to take full advantage of the AfCFTA agreements.
He assured of the resilience and the strength of the sector to take the lead in driving continental trade, through the agreement. (NAN)