Emefiele Urges Financial Institutions to Guard against Emerging Risks

Nume Ekeghe and Oluchi Chibuzor

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has called on risk professionals in the financial industry to broaden their scope of risk management practices in order to guard against emerging risks.

Speaking at the formal inauguration of the Chartered Risk Management Institute of Nigeria (CRMI), which was previously known as the Risk Management Association of Nigeria (RIMAN), in Lagos, yesterday, Emefiele who was represented by the Director of Risk Management Department, CBN, Dr. Blaise Ijebor, stressed that the CBN was committed to fostering robust risk management culture within the industry by enabling the identification, assessment, and mitigation of risks at both institutional and system-wide levels.

Emefiele, emphasised the need for financial institutions to adapt and evolve their risk management frameworks in order to effectively address emerging risks and challenges.

He noted that with rapid advancement of technology and changing dynamics in the financial sector, it had become imperative for risk professionals to expand their expertise beyond traditional areas such as credit and liquidity risk.
Emefiele said: “The Central Bank of Nigeria from its inception has increasingly emphasised the need for financial institutions to build out risk and compliance teams.

“Initially focusing on credit, liquidity and prudential risk management, the lessons learned from previous major risk events such as the global financial crisis, along with greater utilisation of digital channels in the provision of financial services have increased the scope and practice of risk management in the financial services industry.

“Today, we have very mature formal structures in place for identifying, assessing and aggregating risks to enable the formation of an enterprise-wide view of the risks that are associated with financial services and the operations of the central bank. We have also put in place measures to effectively manage these risks.”
He added that the evolution of risk management within the central bank led to the establishment of its Risk Management Department in 2010, describing it as, “an attestation to our commitment and a confirmation that the management of the CBN is willing to lead the industry from the front.”
“We believe that the implementation of a robust risk management framework is critical to the achievement of the Bank’s mandate and safeguarding the stability of the Nigerian financial system. As you would expect, risk management continues to be a major consideration in many of the key decisions and initiatives of the CBN,” he said.

Further speaking on the CRMI attaining its chartered status, he added: “The elevation of RIMAN to a Chartered Institute is a clear testament to your collective commitment to enhancing risk management practices in our country; through the provision of high-quality training and certification programs.
“I, therefore, charge the Institute to use its position to develop a pool of skilled risk management professionals who will help to develop and implement effective risk management strategies and procedures that will help to contain different forms of risks and support the growth and stability of our financial system in today’s rapidly changing world.

“There is no doubt in my mind that the institute, through the promotion of best practices in risk management has the potential to contribute in significant ways to the broader financial sector and the larger economy.
“I, therefore, charge the institute to see itself as a change-maker in our joint effort to grow our national economy and improve the lot of the common man,” the CBN governor said.

On his part, the President CRMI, Dr. Ezekiel Oseni, said yesterday marked a significant day in the history of risk management in Nigeria, following the inauguration of the Chartered Risk Management Institute of Nigeria; an organisation dedicated to promoting the highest standards of risk management practices in Nigeria.

He said: “Our aim is to ensure that individuals and organisations in Nigeria adopt excellent risk management practices to achieve their strategic objectives in a secure and sustainable manner.
“The creation of this institute is an evidence of the commitment and dedication of our professional colleagues towards advancing the practice of risk management and providing our members the opportunities for growth and development.

“As we inaugurate this institute, we do so with a clear vision and our mission is to promote excellence, innovation, and professionalism in risk management, to advocate for the interests of our members, to contribute to national development, to add value to industries and corporates, as well as entrenching best risk management practices in the public sector, and to foster collaboration and networking among relevant professionals, institutes and association,” he added.
He further urged all government institutions to adopt exemplary risk management practices in all their dealings, saying it was crucial for them to embrace effective risk management approaches across their operations.
He said: “We also call on all government institutions to embrace excellent risk management practices in all its transactions. Governments are faced with a wide range of risks, including those related to national security, economic stability and social welfare.
“The government has a responsibility to ensure that public resources are managed effectively and efficiently. Excellent risk management practices will help governments to identify, evaluate, and manage risks in a timely and effective manner.
“Therefore, it is essential that government institutions in Nigeria adopt excellent risk management practices to achieve their strategic objectives.”