Opara: Reforms of Present Administration Commendable

In this interview, the President of the Chartered Institute of Bankers of Nigeria, Ken Opara commended the new administration’s monetary and policy direction, stating that it is targeted at boosting the economy. He also spoke extensively on pertinent industry issues. Nume Ekeghe presents the excerpts:

Can you assess the banking sector, where it is now and where you think its headed?

I think essentially, the banking industry has gone a very long way and  has made a very significant impact in the economy. It has supported the real sector,  supported small businesses, and has built a viable payment system. But it is also important to state that we are not there yet in terms of where we should be. There are a lot of other challenges including the need to deepen financial access to SMEs as well as support to real sector, agricultural processing/value chain and infrastructural development. In summary, payment services need to be more friendly, more prompt and more customer – centric.

You just mentioned how vital it is to support manufacturing and the real sector, however recently there were reforms on foreign exchange management, how much of an impact do you think it would have on manufacturing, the economy in general and on inflation?

The key thing for us to understand is that the essence of unifying the exchange rate is to have a single foreign exchange rate where players in every sector can be able to access their FX need in a uniform and transparent rate. Once you’re able to do this, you will be able to have confidence of investor in inflowing FX into the economy knowing quite well that foreign exchange rate will reflects the real value of Naira. Once this happens, it improves the flow of FX which will also support FX availability for those in the manufacturing sector that may require FX to bring in equipment or raw materials that will boost their output.

You can see that the Central Bank of Nigeria (CBN) has directed oil companies to sell FX directly to banks to deepen the FX availability at the I & E window. This may not immediately translate to huge inflows from FPI and FDIs. The issue of negative yield on their instruments due the inflation is another area requiring attention.

Can you assess this new administration’s monetary and fiscal direction, can you evaluate the thoughts around the recent reforms and their impact? Are we headed in the right direction?

The reforms have been commendable so far. Of course, you can see that from the issue of fuel subsidy removal, which had been a thorny issue. CIBN had organised a program just recently to show the opportunities that are available because of fuel subsidy removal. For instance, the country spent about N4.3 trillion alone in the last one year on fuel subsidy. So, this means that this amount can now be channeled to sectors like, infrastructure, health education and other critical areas.

The unification of foreign exchange rate like I said, is also a good step.  All that is needed is disciplined execution in terms of allowing the rate to continue to be market driven. We need to also support export through various incentives to deepen our FX earnings. The tax reform and the deferment of the implementation of the finance act by 90 days, including the removal of the 5% excise duty and escalations on locally manufactured products, are seen as steps in the right direction.

Finally, since you emerged as president, can you tell us the focal points and what we can expect from you throughout your tenure? 

Essentially, my agenda is titled the future is now. We have achieved a significant milestone getting the Gen Z and millennia to develop interest in our programs and is already showing result. For the first time in the history of the institute, in a single year, we have been able to grow the membership base by over 18,000. Out of this, the younger ones represent over 15,000. There is a growing interest by the younger ones in the activities of CIBN. Today is a major landmark as we flag off the maiden edition of the Annual Gen Z forum.

We have also built strong collaboration with critical stakeholders such as FINTECH, Afrexim, RIMA etc.  Through the Afrexim collaboration, we have developed curriculum and capacity certification program on trade, especially for businesses seeking to take opportunities in the African continent free trade area (AfCFTA).

Technology Innovation is another milestone and so we have started the process of full automation. It will interest you to note that for the first time in the history of the Institute, we have been able to run full proctoring program examination, meaning that students had to take their CIBN examination online without having to go into a physical space. And that is also attributed to the fact that we created a digital platform that is seamless. This exercise commenced successfully in the last April diet examination. We would continue to support the issues that confront the industry as CIBN remains the conscience of the financial industry. We would continue to organise programs working with the body of bank CEOs. On the legacy project, we are pleased to note that we recently completed a metro 160-seater auditorium at Olabisi Onabanjo University, Ago-Iwoye, bringing to a total of seven of such projects in seven of our higher institutions spread along the entire geographical areas of the country. The project is at advanced stage of completion.