E-Financial
Driving Nigeria’s Economy to G10 Status
Nigeria’s economy has all it takes to rank amongst the world’s top 10 economies. Driving the polity effectively towards that goal is the urgent task of the country’s present political and economic managers.
Nigeria’s 2015 general elections have been won and lost. The nationwide focus on politics for almost a year has however been detrimental to the economy and the financial markets.
Despite being poised for fast growth, Africa’s largest economy is currently crawling on all fours.
Key economic and financial indicators are down year-on-year and year-to-date. Ditto for corporate earnings.
The most significant being a 1.5% loss in GDP growth and speculative devaluation and volatility of the national currency, the Naira, which has lost at least 20% value against most benchmark currencies.
The year-end outlook is also not bright. Most investors and corporate players are coasting and seem to have accepted 2015 as a lost year from a productivity standpoint.
Politics in Nigeria as clearly proven by recent events is driven by political cum personal interests. This is always at variance with the national economic interests.
The cumulative cost of perceived political instability, record low crude oil prices, and dipping confidence in economic and financial markets is estimated to be anywhere between US$25-30bn. Who is counting?
Certainly not the political class. They have not come to terms with the fact that a new budget cycle has commenced, and it’s clear that the only tangible approach the new government can take, is to start the process of amending the existing budget and delivering a brand new 2016 budget that reflects contemporary economic realities.
After hinting that the Central Bank of Nigeria’s currency controls were making Nigeria’s bond market transactions too complex to meet its rules, JP Morgan, the United States-based lender, has now moved to expel Nigeria from its Emerging Market Bond Index (EMBI) by the end of September 2015, as a result of the illiquidity and lack of transparency in our foreign exchange market.
This exit will hurt Nigeria’s financial and economic ratings, putting the nation’s $31bn external reserves under threat of further massive sell-offs of Nigerian assets by foreign portfolio investors.
The cost of borrowing will increase; access to the international financial markets for both sovereign and corporates will also become limited. More importantly, this exit will stem the inflow of portfolio investments which peaked at US$20.5Billion in 2013, that otherwise could help stabilize the Naira and balance of payments.
JP Morgan’s EMBI with around $210bn in assets under management is the most widely used and comprehensive emerging market sovereign debt benchmark. Nigeria was added in the index in 2012 when liquidity was improving, making it the second African country after South Africa to be included.
To state the obvious, the lack of articulation on policy and economic direction by the new government is not helping matters and is unsettling the financial markets.
Time is money. And in the fast emerging global fiscal order, lost time and opportunities may never really be regained.
The next challenge the Nigerian government faces is the validation and structured financing plan for the current fiscal deficit, estimated at =N=6.5Trillion.
The government’s actions on the fuel subsidy could significantly increase this figure. With the restructuring and swap of state government commercial bank loans into Treasury Bonds, the new government has increased the domestic debt profile by =N=1Trillion overnight.
Unfortunately state governments have not been compelled to execute conditional covenants, such as adhering to the tenants of the Fiscal Responsibility Act, which stipulates provisions for fiscal discipline.
With a US$49bn domestic debt and US$10.8bn external debt overhang, Nigeria is now committing 23% of its fiscal revenues to servicing debt.
With the levels of projected fiscal deficit, we might exceed the revenue-to-debt service best practice benchmark of 25% by year end. The alignment of fiscal and monetary policy which the economy befitted from over the last five years, seems to have been lost over the last several months.
The apex financial institution and industry regulator, the CBN, seems to have lost its independence and the intellectual fecundity central banks are renowned for.
With an outflow of new policy pronouncements almost every week, the Bank has struggled to articulate a well thought out strategy for managing the Naira.
This misalignment of fiscal and monetary policy has started to impact the macroeconomic indicators as inflation creeps up into double digits. Unemployment also stands at a high 35%.
The effects of quantitative easing are manifesting on the Naira exchange rates as interest rates remain artificially high at 25%. This, despite the excess supply of the currency in circulation with M2 at =N=19Trillion, 25% or =N=4.75Trillion denominated in US dollars deposit.
Our commercial banks have also exacerbated the situation: about 50% of their loan books are denominated in US dollars.
These artificially high rates, and the distortion it causes are not sustainable in the long run. Western nations over the last eight years have maintained rates at below 1% clearly aimed to spur economic recovery.
Nigeria’s financial intermediation rates at 25% cannot support productive investment and development; it will also stunt economic growth. Major reforms are therefore required in the banking system to support single digit rates.
Banks also have to better deploy technology to reduce and manage costs. Their productivity and efficiency levels will consequently improve leading to a more competitive financial services sector
.
Beyond the macro economy, we need to do a critical reappraisal of our trade and investment policies, we need to ensure they are properly integrated into the global value added system.
The domestic gains and success we have had in the cement sector with import substitution and backward integration has primarily been driven by an individual and unfortunately not yet replicated nor institutionalized in other critical sectors such as agriculture, another potential engine room of Africa’s political economy considering its huge social development and value chain effect.
Drastic attention also needs to be paid to Customs and Excise reform and management to ensure proper implementation of Trade Policy, Industrial Development and Investment. The corruption menace of duty waivers, duty evasion, smuggling and weak import documentation also continues to affect the Naira, clearly disrupting and discouraging industrial development, investment and expansion.
Nigeria has been defined as a corrupt country with weak institutions, poor governance, and a compromised judiciary with consistently low scores in the ease of doing business and competitiveness rankings. Despite or in spite of all these quirks, the Nigerian economy with a GDP of US$535Billion is the largest in Africa with a global G20 ranking.
Until recent times, the Nigerian economy sustained a 7% annual growth rate, ranking it amongst the top three fastest growing economies globally.
Our substandard physical and social infrastructure needs to be upgraded; we need to make Power, Healthcare and Education sectors key focus priorities. Addressing the infrastructure deficit, corruption, good governance and the rule of law will no doubt propel Nigeria to realize its potential and capacity as a G10 economy.
Indeed, despite the absence of a cabinet, the euphoria the new government has generated, including its ongoing efforts to clean up the Augean stable is highly commendable. Restoring sanity into the polity was never going to be an easy undertaking. President Buhari’s recent working visit to Washington DC, USA left a good a good impression in the minds of our international business and diplomatic allies. They remain convinced that the president is on the altruistic path.
His top level meetings, appearances and the opinion pieces in the critical and pro-Western US media were obviously left a good impression. This was an African leader who seemed genuinely sincere, and genuinely concerned about Nigeria’s place in the global economy.
Going forward, the President and his ministerial team (even before he finally unveils them) must constantly balance the dual priorities of institutionalizing probity and economic management. Curbing high level graft must be accorded equal weighting as curbing hyper-inflation.
The Nigerian environment despite all its shortcomings and shenanigans is clearly a potential G10 economy. A recent Economist article highlights the “opportunity that knocks” with the new government in place, having endorsed President Buhari before the election. A 2013 article in the same publication cautions that Nigeria, “Africa’s giant is waking up but still looks unsteady on its feet like a heavy weight boxer who has gone too many rounds.”
The same publication has in the past enquired if “anyone has seen a giant” and warns further that the awaking giant eventually might fall flat on its face.
The Nigerian economy is a purposeful and powerful contraption akin to a Formula One racing machine. Unfortunately, the economy has in the past, been driven by a leadership and a political elite class behaving very much like a “Danfo Driver” in the driving seats of a Formula One racing machine.
In the final analysis, the Nigerian President needs to demonstrate policy leadership and must not be shy on the issues of the economy. To achieve G10 targets, we need the right drivers with strong leadership thinking and backing.
The President invariably has been elected on a change platform. However, events in the legislative arm of governance give serious cause for concern. There are critical laws that need to be unbundled and a lot more bills that needs passage to move our economy forward. A pandemic scenario where division, derision and political acrimony continuously stem passage of critical bills is detrimental to economic progress.
It is fitting, at a time like this, for one to seek counsel from the indefatigable Machiavelli whose reflections on the subject of change, captured in his classic tome, “The Prince” speak to the Nigerian situation:
“And let it be noted that there is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful in its success, than to set up as a leader in the introduction of changes. For he who innovates will have for his enemies all those who are well off under the existing order of things, and only the lukewarm supporters in those who might be better off under the new. This lukewarm temper arises partly from the fear of adversaries who have the laws on their side and partly from the incredulity of mankind, who will never admit the merit of anything new, until they have seen it proved by the event”.
#
Adebajo, an investment banker & economist is the CEO of The CFG Advisory.
Securities and Exchange Commission (SEC) yesterday said that Nigeria’s digital finance ecosystem recorded about $96bn in cryptocurrency and other virtual asset transactions.
Emomotimi Agama, director-general, SEC,
Emomotimi Agama, director-general, SEC, revealed this during a Citizens and Stakeholders Engagement Session organised by the Federal Ministry of Finance in Abuja.
He noted the the size of transactions within the digital asset space makes regulation necessary in order to protect investors and ensure transparency.
According to him, the regulatory framework for the sector was strengthened following the enactment of the Investment and Securities Act 2025, which gives the commission powers to regulate digital assets and other emerging financial technologies.
He said the law also confirms the SEC as the apex regulator of the capital market while introducing provisions aimed at monitoring systemic risks and aligning Nigeria’s market operations with global standards.
Agama said the Nigerian capital market has continued to support investment activities across the economy, adding that the commission approved ₦3.68 trillion worth of new capital market issues in 2024, covering both equities and fixed income instruments.
He added that the market played a major role in strengthening the banking sector during the recent recapitalisation exercise, with more than 31 banks raising funds through the capital market to meet new capital requirements.
The SEC director-general said the performance of the market has improved significantly in recent years, with total market capitalisation rising from ₦55 trillion in 2024 to about ₦127 trillion currently.
He added that the capital market’s contribution to the economy has also expanded, with the market capitalisation-to-GDP ratio rising from about 13 per cent to roughly 33 per cent.
According to him, the commission has introduced several measures aimed at protecting investors and building confidence in the market.
He disclosed that the regulator has issued more than 90 advisory notices warning Nigerians about suspicious investment schemes and risky financial offers.
Agama also said the commission has intensified its actions against fraudulent investment schemes, including Ponzi operations, while working with the Nigeria Police Force to investigate and prosecute offenders.
He warned that many people who fall victim to such schemes often invest in unregistered platforms promising unrealistic returns, advising investors to verify whether any investment opportunity is approved by the SEC before committing funds.
The SEC boss said the capital market has also supported infrastructure development across the country through bond issuances by state governments.
He explained that several public projects including markets, stadiums and other infrastructure have been financed through subnational bond issuances raised in the capital market.
According to him, Nigeria protects investors in state bonds through the Irrevocable Standing Payment Order (ISPO) system, which allows loan repayments to be deducted directly from states’ allocations from the Federation Account.
Agama said the commission has also established an Office of Municipal Fund Development to help state and local governments access capital market financing for development projects at the grassroots level.
He added that the SEC supported the launch of the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) to help address Nigeria’s housing deficit by providing long-term funding that allows Nigerians access to mortgages at single-digit interest rates.
Looking ahead, he said the commission is working to deepen the market by raising the capital market capitalisation-to-GDP ratio from about 30 per cent toward levels seen in emerging economies such as India, where the ratio stands at about 92 per cent.
Also speaking at the session, Mr. Raymond Omenka Omachi, permanent secretary of the Federal Ministry of Finance, addressed concerns about the performance of the federal budget, explaining that several factors have affected implementation.
He said Nigeria has faced challenges meeting the oil production benchmark of about 2.1 million barrels per day, while fluctuations in global oil prices have also affected revenue.
The Permanent Secretary added that the budget benchmark was set at $75 per barrel, but oil prices at some point fell below $60 per barrel, reducing expected government revenue.
He noted that rising debt servicing obligations and increased salary commitments have also placed pressure on available funds.
According to him, the government is taking steps to improve the situation through regular monitoring of revenue and expenditure.
He said the ministry now holds weekly cash management meetings every Monday to review government finances and identify ways to boost revenue performance.
The Permanent Secretary added that the government expects improvements once Nigeria returns to operating a single budget cycle, noting that plans are underway to collapse overlapping budgets so that the country will run only one national budget from 2026 onward.
The Central Bank of Nigeria (CBN) has removed the requirement for customers to present affidavits when reactivating dormant bank accounts, a move aimed at simplifying the process of reclaiming inactive funds while maintaining safeguards against fraud.
In a circular issued to banks and other financial institutions, the apex bank said the decision followed representations from stakeholders who had raised concerns about the administrative burden associated with affidavit requirements.
The directive was contained in a circular titled “Guidelines on the Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria”, dated March 12, 2026.
The new directive supersedes an earlier circular issued on February 17, 2025, and takes immediate effect.
According to the circular signed by Rita I. Sike, director of the Financial Policy and Regulation Department, the revised framework allows banks and other financial institutions to accept alternative channels for dormant account reactivation requests, provided adequate risk management measures are in place.
The CBN stated that the existing guidelines mandate banks and other financial institutions to implement specific measures and disclosures relating to dormant accounts, unclaimed balances and other financial assets in order to improve transparency and facilitate the reunification of funds with their rightful owners.
“The guidelines are designed to enhance transparency, facilitate the reunification of funds with their rightful owners, and ensure full compliance with applicable legal and regulatory frameworks,” the CBN said.
Under the new directive, banks must still maintain strict identification and verification processes when handling requests to reactivate dormant accounts.
“In addition to the in-person submission of reactivation requests required under Section 8.0(i) of the Guidelines, banks and other financial institutions shall adopt alternative channels for receiving requests for the reactivation of dormant accounts,” the circular stated.
However, the apex bank emphasised that institutions must implement appropriate risk management strategies, including robust identification and verification measures, to ensure that the individual making the request is properly authenticated.
“Following representations received from stakeholders, the CBN hereby rescinds the requirement under Section 8.0(ii) for the mandatory use of affidavits in the reactivation of dormant accounts,” the circular said.
Despite the removal of the affidavit requirement, the regulator directed banks to apply enhanced due diligence procedures when processing reactivation requests.
The CBN clarified that the removal of affidavits applies only to dormant accounts that have not yet been transferred to the Unclaimed Balances Trust Fund Pool Account.
“For the avoidance of doubt, affidavits are no longer required for reactivating dormant accounts that have not been transferred to the UBTF Pool Account,” the regulator said.
However, customers seeking to reclaim funds that have already been transferred to the Unclaimed Balances Trust Fund Pool Account will still be required to present affidavits in line with the provisions of the existing guidelines.
“This rescission does not extend to the reclaiming of funds already transferred to the UBTF Pool Account, where affidavits remain mandatory,” the circular noted.
Beyond the reactivation process, the CBN also strengthened disclosure requirements relating to dormant accounts and unclaimed balances.
Banks and other financial institutions have been directed to publish specific information relating to dormant accounts that have not yet been transferred to the UBTF Pool Account, as well as unclaimed balances already transferred to the fund, on their operational websites.
The information to be disclosed includes the names of authorised account holders, the type of account, the name of the financial institution and the branch where the account is domiciled.
Financial institutions that do not maintain operational websites are required to publish the information on the official websites of their respective industry associations.
In addition, the CBN directed banks and other financial institutions to publish the mandated information annually in at least two national daily newspapers.
Where such disclosures exceed two full pages, institutions may instead publish a single-page notice in at least two national newspapers directing customers to a dedicated and easily searchable section of their corporate websites containing the full list of dormant accounts.
The regulator, however, provided exemptions for smaller institutions. State and unit microfinance banks are only required to display the information at their business locations and are not mandated to publish the details in national newspapers.
The CBN also addressed concerns raised by financial institutions regarding compliance with Nigeria’s data protection framework.
The regulator explained that the disclosure requirements are consistent with the provisions of the Nigeria Data Protection Act, 2023, which permits the processing of personal data where it is necessary for compliance with a legal obligation or the protection of the vital interests of individuals.
It further cited Section 72(11) of the Banks and Other Financial Institutions Act, 2020, which empowers the CBN to issue guidelines on the administration of unclaimed funds in banks and other financial institutions.
“Accordingly, the required disclosures are legally justified and fully consistent with the applicable provisions of the NDPA and BOFIA,” the apex bank said.
Central Bank of Nigeria (CBN) has introduced stricter Bank Verification Number (BVN) enrolment and data access rules to prevent suspected fraudulent transactions, effective May 1, 2026.
This was disclosed in a statement issued over the weekend and titled “Addendum to the Revised Regulatory Framework for Bank Verification Number (BVN) Operations and Watchlist for the Nigerian Banking Industry 2021.”
The statement was signed by Musa Jimoh, director of the Payment System Policy Department.
The CBN said it introduced the ‘Revised Regulatory Framework for Bank Verification (BVN) and Watchlist for the Nigerian Banking Industry 2021’, to promote a stable financial system.
The apex bank reiterated that enrollment for the BVN be limited to individuals aged 18 and above, while amendments to phone numbers linked to a BVN will be restricted to a one-time change only.
Financial Institutions are mandated to establish and maintain a temporary watchlist for BVNs implicated in suspected fraudulent transactions reported by a financial institution.
“A BVN may remain on this temporary Watchlist for a maximum period of twenty-four (24) hours. During this period, the BVN owner shall be contacted to clarify the identified transaction(s).
Enrolment for BVN is restricted to individuals who have attained the age of eighteen (18) years and above. Amendments to phone numbers linked to a BVN shall be allowed only once,” the statement read.
The CBN insisted that it maintain an exclusive right to access BVN databases and to approve access to them by financial institutions.
“Access to the BVN databases shall be exclusively granted to Central Bank of Nigeria (CBN) licensed financial institutions. Notwithstanding this provision, the Central Bank of Nigeria (the Bank) reserves the right to approve access to the BVN databases in extenuating circumstances and in accordance with the provisions of extant laws,” the statement said.
The directive was part of the CBN’s recent regulatory amendments in combating fraudulent activities.
On Tuesday, the bank issued new regulations, “Baseline Standards for Automated Anti-Money Laundering (AML) Solution for Financial Institutions in Nigeria’, to all financial institutions, in a bid to automatically counter money laundering and terrorism financing.
Crypto Transactions Hit $96Bn in Nigeria -SEC
PwC Warns Nigeria Telcos of AI Fraud Risks
Lawyer Drags FG Court over Controversial Health Data Sharing Agreement with US
Elumelu Tags Elon Musk, Disowns AI-Generated Scam Video
FG Determined to Protect Rights, Privacy Online- NITDA
Kaspersky Discovers New Phishing Campaign Exploiting Google Tasks Notifications to Steal Corporate Credentials
esentry 2025 Report Shows Healthcare, Financial Services and Telecoms as Staging Grounds for Increased Cyberattacks in Africa
AfDB, UNDP Launch $10Bn AI Initiative for Africa
Mutual Benefits Assurance Settles ₦5.9bn Claims in January 2026
MultiChoice Suspends Yearly DStv Price Hike as Canal+ Pushes Growth
Telecom3 days agoVDT Communications Achieves Two Prestigious Certifications ISO /IEC 27001:2022, ISO/IEC 27032:2023 Reinforcing its Leadership in Broadband Service Provision
E-Financial2 days agoCBN Rolls Out New Rules for Safer Instant Payments, More Customer Control
News2 days agoNIMMME Inaugurates Engr. Michael Orekyeh as 13th National Chairman in Abuja
Telecom2 days agoMTN Nigeria Races Ahead in Fibre Broadband Market
E-Financial2 days agoCBN Tightens BVN Rules to Curb Fraudulent Banking Transactions
E-Financial2 days agoNova Bank Appoints Jude Anele as Managing Director/CEO
E-Business2 days agoTech Expert Unveils BAT-BOT AI App to Curb Fake News ahead of 2027 Elections
Broadcasting14 hours agoSpotify’s Loud & Clear Report Reveals Over ₦60Bn Revenue for Nigerian Artists in 2025