Member-States of the West African Monetary Zone (WAMZ) must continue to collaborate and cooperate with each other to achieve regional financial integration and shared economic prosperity, the governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said.
Cardoso spoke in Abuja on Monday at the 10th meeting of the College of Supervisors for Non-bank Financial Institutions (NBFIs) of the WAMZ. He was represented by the Acting Director (Other Financial Institutions Department) of the CBN, Abayomi Arogundade.
As key components and strategy of the WAMZ financial ecosystem, Cardoso said the NBFIs, or Other Financial Institutions (OFIs) sector, must unite towards regional financial stability, integration and shared economic prosperity.
He acknowledged the giant strides by the College since its formation, including the development of the Model Act for Non-Bank Financial Institutions and Non-Bank Financial Holding Companies of the WAMZ, which was approved in March 2024.
Other notable achievement by the College included steps taken to establish the Expert Committee on the Harmonisation of Supervisory Practices and Prudential Ratios of the NBFI Sector.
Highlighting emerging trends, Cardoso noted the increasing role of fintech innovations and their implications for financial stability in the region, pointing out that “Fintech loans and digital platforms are reshaping financial intermediation”.
“We must continue to push forward the agenda of strengthening the anti-money laundering practices; deepening supervisory capacity on cybersecurity and fintech regulation, and the implementation of risk-based supervisory approach,” Cardoso said.
Reiterating the need to monitor trends, risks and innovations of NBFIs/OFIs, he warned that their increasing transaction volumes posed significant financial system stability risk.
He identified Fintech loans as one of the most commonly reported innovations in the sector, pointing out that while this may appear small in relation to the size of credit by deposit money banks (DMBs), a growing trend in the volume of these loans is posing serious risks, particularly those linked to crypto-currency or stablecoin assets.
The CBN governor also underlined the College’s focus on climate risk regulation, in view of the sector’s vulnerability to environmental shifts and the need for tailored regulatory responses to align with global standards.
He urged delegates to leverage the platform for knowledge exchange and collaboration, while emphasizing the importance of learning from each other’s experiences in navigating the evolving financial landscape of West Africa.
The Chairman of the College, Yaw Sapong, in his remarks, acknowledged the crucial role by non-bank financial institutions in promoting financial inclusion and economic growth.
He identified the achievements by the College, including harmonized regulatory frameworks, automation of supervisory processes, and strengthened AML/CFT regimes, while stressing the need for coordinated policy responses to address current economic challenges, including inflation and currency fluctuations.
“We must continue to work together to build a resilient and inclusive financial sector that supports sustainable economic growth in our region,” Sapong urged.
The Director General of WAMI, Dr. Olorunsola Olowofeso underscored the need to strengthen the resilience in the financial sector, citing emerging risks, such as climate-related risks, cyber threats, and digitization challenges.
“We must continue to monitor policy actions and spillovers to ensure the financial system is resilient,” he said, assuring that WAMI remained committed to implementing the WAMZ integration agenda.
The meeting which was convened to discuss critical issues facing the non-bank financial sector in West Africa, was hosted by the West African Monetary Institute (WAMI).
The other agenda of the meeting included to review progress made in the NBFI sector since late 2023 and formulate strategies to address current challenges, with discussions covered regulatory harmonisation, cybersecurity, and the impact of digital innovations on financial services in the region.
Participants included regulators, policymakers, and financial experts from across the region, namely Directors of Other Financial Institutions Supervision Departments from Member States; representatives of the West African Institute for Financial and Economic Management (WAIFEM), WAMI and CBN.
