N760bn Dfis’ Contribution Insignificant- Cbn
BEVERLY HILLS, February 23, (THEWILL) – Central Bank of Nigeria (CBN) has expressed reservation on the N760.8 billion contributed to the country's economy by the Development Finance Institutions (DFIs) mid 2015, noting that the contribution, if not improved on, may have little or no impact on the country's economic diversification drive.
Godwin Emefiele, CBN governor, who raised this fear while presenting his keynote address at the maiden edition of the Bi-Annual Forum for Stakeholders of DFIs held in Abuja, noted that some of the DFIs in the country had continued to exhibit weaknesses and deterioration in key performance indicators such as Capital Adequacy, Asset Quality and other operational efficiency measures.
The apex bank governor, who noted that concerted efforts were required to tackle economic challenges in the face of dwindling foreign reserves occasioned by the fall in the price of crude oil, reiterated the need for DFIs to play a crucial role in supporting the government's economic diversification agenda.
“As at 30th June, 2015, out of a total credit of N14.7 trillion granted to the economy, DFIs contributed N760.8 billion, representing just 52 percent. This contribution must increase significantly if the DFIs are to make the needed impact on the targeted sectors,” Emefiele said.
He informed of CBN's readiness to play its regulatory and supervisory roles towards the orderly growth and development of the DFI sub-sector and the economy at large.
In his welcome address, Okwu Joseph Nnanna, deputy governor (Financial System Stability), observed that the DFIs had been unable to perform optimally due to some challenges ranging from the divergence between State and Private Sector enterprise model, weak capital base and restricted access to stable long-term funds among others, and expressed hope that the stakeholders forum would come out “with clear actionable suggestions that would provide the way forward for operators in the sub-sector to effectively support the objectives of the government and better appreciation of the industry by the regulator.”
Story by David Oputah