The Federal Government slashed the budget of the Central Bank of Nigeria (CBN) by half, a top CBN official has said.
The CBN Director of the Financial System Stability (FSS 2020), Mr Mohammed Suleiman, said that the budget cut has affected the capacity of the apex bank to fund some financial system initiatives.
“The FSS 2020 programme since its inception has always been bankrolled single handedly by the CBN; the CBN is beginning to weary a little bit because the current budget this year was reduced by 50 per cent and that is majorly affecting some of our capabilities to implement some of these strategic objectives,” he said when members of the FSS 2020 visited the the Nigerian Deposit Insurance Corporation (NDIC) in Abuja.
Suleiman said that with the cut, all implementing institutions now need to support the FSS 2020. “It is not a CBN project it is a financial system project, all financial system players have to take ownership of the project and be willing to support it,” he said.
The FSS 2020 is a national reform programme aimed at developing and transforming Nigeria’s financial sector into a growth catalyst to fast-track the achievement of the Vision 20:2020 and engineer Nigeria’s evolution into an international financial centre.
The FSS 2020 is aimed at strengthening and deepening the domestic financial market, enhancing the integration of the domestic financial markets with the external financial market, supporting the real sector and promoting sustainable economic development.
During the exchange of views on Wednesday on ways to move the FS2020 project forward, an official of the NDIC said it costs about N198 billion to fund the FSS2020 project.
Suleiman said: “We will structure the FSS2020 to include dedicated team for monitoring, tracking and reporting and ensure regular quarterly or biannual meeting of stakeholders for the progress and implementation of the strategy.”
He identified some of the challenges the FSS2020 team have had to grapple with to include inadequate financial skills development particularly in the capital market; unavailability of funds for long term financial products; non existence of listing rules for special purpose vehicles (SPVs); increasing cost of transactions and operations and weak risk management.
Other challenges include low level of card usage on point of sale (PoS) terminals and high automated teller machine (ATM) usage for cash transactions; physical insecurities and prevalence of financial fraud; low levels of financial literacy and inclusion; low acceptability of mobile payment and merchant locations; non existence of sound collateral management; inadequate legal and regulatory framework for commodities market and unwillingness of private companies to go public; inadequate foreign direct investment and non existence of integrated credit scoring system.