Despite Covid-19 Disruptions, Nigerian Banking System Sound—-Emefiele

Despite the negative impact of the Coronavirus pandemic which affected many sectors of the economy negatively, the Nigerian Banking sector remain sound and resilient.

The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele gave the assurance at the 20th edition of the National Seminar on Banking and Allied Matters for Judges, organized by the Chartered Institute of Bankers of Nigeria, in collaboration with the National Judicial Institute.

The CBN Governor who spoke at the virtual meeting said that the COVID-19 pandemic had unraveled itself as a global health and economic crisis of seismic proportions.

Emefiele who was represented by the Deputy Governor, Deputy Governor, Financial Systems Stability, CBN, Aisha Ahmad, said domestic and international travel and global trade value chains have been severely disrupted with significant negative impact on financial markets, financial services industry, oil and gas, health, transport and aviation, education, hospitality and tourism among others.

He said individuals, families, businesses, industries, economies, all have had to adapt to a new normal, even as global coronavirus cases continue to rise above 50 million.

He stated that the effects of the pandemic, particularly the crash in international oil prices, disruption in trade value chains and muted business activities during the
lockdowns have severely impacted economic output and heightened domestic macroeconomic vulnerabilities.

The Governor explained that for instance, Gross Domestic Product growth rate for the second quarter of this year contracted by 6.10 per cent; compared to 1.87 per cent growth the first quarter, indicating a decline of -7.9 per cent.

He said, “The Nigerian financial services sector continues to be resilient, with positive financial soundness indicators evidenced by strong capital adequacy, liquidity and asset quality metrics.

“Most importantly, banks and other financial institutions sustained the credit growth momentum, channeling significant amount of lending of over N3.7trn to the real sector– manufacturing, consumer, agriculture.

“The banking and payments system also retained its operational resilience, maintaining availability of electronic payment and mobile banking channels.

“For instance, electronic transaction volumes increased by about 67 per cent during the lock down with increased transactions at agent networks, whilst the payment system infrastructure accommodated the surge as more citizens moved to electronic channels.”

To stimulate fast trial and opportunities in the new normal, the apex bank boss spelt out the critical steps the judiciary sector should undertake as a matter of urgency.

The judicial system, he noted, should key into digital transformation to improve the efficiency of the justice delivery system.

He added, “Electronic trials should be used to complement traditional court hearings to clear backlog and improve the speed of dispensation of justice.

“The judicial system must keep abreast of the transformations to be in a pole position to adjudicate cases presented by the financial sector.

“The sector should ramp up investments in critical infrastructure needed to function in the new normal.”

He also said thrt is need for continuous learning and capacity development in Information Communication Technology skills to enable the judiciary to maintain its support for the financial services industry in its intermediation role.

In his address, Mr. Bayo Olugbemi, President/Chairman of Council, noted that the banking sector has not been left out of the covid-19 disruption.

He told the participants to avoid being used by recalcitrant debtors to avoid contractual obligations freely entered into.

He said that ‘’The courts can support economic growth in the country and discourage this unsavoury practice by ensuring that, once it is established that a loan was disbursed to a customer who is seeking protective reliefs, the payment of the money advanced into court should be a minimum pre-requisite to commencing litigation or obtaining such orders against the lender.”