By Hamid Ayodeji
Aishah Ahmad, the deputy governor, financial system stability, Central Bank of Nigeria, has encouraged banks to maintain their commitment to sustainability in designing their business models in order to enable them manage disruptions and make positive environmental and social impact in their quest to deliver value to their stakeholders and customers.
She pointed out that banks and other financial Institutions can only survive disruptive events if they fully embrace sustainability principles which had become even more critical during periods of significant disruptions such as the current corona virus pandemic ravaging the world. These were contained in her remarks at a recent Chartered Institute of Bankers if Nigeria (CIBN) Advocacy Dialogue Series 2.0 which focused on an enhanced sustainable banking (ESB) model in the event of major economic and business disruptions.
Ahmad said though primarily a health crisis, the negative spillover effects on business and the economy are complex and pervasive, considerably slowing economic activities in most countries.
“Prior to the disruption caused by the COVID-19 pandemic, financial service was undergoing significant evolution. Banks have had to modify their business models to address changes caused by innovation, digitalization, and new entrants by fintechs, increasing regulation and changing needs and behavioral patterns of customers.
“These developments have triggered very aggressive changes in the financial services industry, introducing significant dynamism into the industry’s value chain thereby changing the mode of the production, delivery and consumption of financial products and services, she asserted,” she said.
According to her the Central Bank of Nigeria (CBN) has been at the forefront of entrenching sustainable banking principles in the Nigerian banking industry through the implementation of the Nigerian Sustainable Banking Principles (NSBP), which has formally been adopted by the CBN and thirty three banks, discount houses and development finance institutions (DFIs).
Jibril Aku, vice chairman, FMDQ Group, who also spoke at the event revealed that the Nigerian economy was at the risk of a second recession influenced by a new financial order Post COVID 19.
“To stimulate economic growth and opportunities the banking Sector and Capital Markets should undertake necessary effective measures as a matter of urgency,” Aku said.
For the policy makers, he called for the recalibration of national economic strategy to reduce dependence on the oil and gas sector which would boost the growth of the non-oil sectors and sustainable development of the country as a whole.
There was also the need, Aku said, for adequate investment in the health care sector, digitization of education in public schools to prevent the collapse of educational system as well as unified and market determined exchange rate regime.
