E-Financial
Why Central Banks Need to Take Human Rights More Seriously
Many central banks are rethinking their approach to the environmental and social impact of their operations.
According to Danny Bradlow, SARCHI Professor of International Development Law and African Economic Relations, University of Pretoria, this is because their decisions can affect access to housing, healthcare, education, work, to adequate food and water and the security of their pensions.
At the One Planet summit in Paris two years ago, a network of central banks and supervisors was set up with the main focus on climate change. Now with 40 members from five continents, the network is drawn to pay more attention to other environmental and social considerations.
The precise mandates of central banks vary. But one thing they all have in common is responsibility for maintaining price stability. Their primary policy tools for achieving this objective are interest rates, the capital and reserve requirements for banks, and trading debt instruments in financial markets.
Bradlow said that Central banks also act as a lender of last resort to the banking system or more generally to the financial sector.
They regulate and supervise the activities of banks and other financial institutions. They manage the country’s payment system, maintain financial stability and manage the country’s foreign exchange reserves. In some countries, the central bank can be given additional responsibilities such as promoting development finance or financial inclusion.
To fully understand the risk that climate poses to price and financial stability, central banks need to consider how changing weather patterns will affect a number of variables. These include food production, migration patterns, and people’s access to food, water, housing, and jobs, and how these, in turn, influence aggregate demand, credit allocation, inflation and government deficits.
In other words, as I explain in more detail in this article, central bankers are being inexorably pushed to reconsider the relationship between central banking and human rights.
The connections
According to Bradlow, the mandates, powers, and governance arrangements of all central banks are established by law. They must comply with all the applicable law including the constitutional and international legal obligations of their home states. In principle this means that central banks are bound by the international human rights commitments of their sovereigns.
Historically, central banks have been able to avoid dealing with human rights issues. This is because the political leadership determines the price stability goal for the economy and then lets the central bank decide how to meet this inflation objective.
This arrangement suggests that the central bank’s independence is limited to the technical issues relevant to achieving the goal set by the government. In addition, it assumes, at least implicitly, that the social and environmental implications of the country’s monetary and financial goals are the government’s responsibility.
However, in reality central banking is not a purely technical function. For example, the social and environmental impact of its decision to change interest rates will vary depending on how it implements the decision. If the central bank decides to change interest rates through open market operations the social and environmental impacts will depend on which instruments it chooses to trade – and in what proportions. On the other hand, these affects will depend on the decisions of banks if it implements the decision by changing the reserve requirements or the interest rate it charges banks for short term loans.
There are some noteworthy examples. The central banks of Kenya, the Netherlands and the Federal Reserve Bank of San Francisco consider factors such as community development and financial inclusion in their stewardship of their financial systems. And the Dutch central bank now has a mandate to include sustainability in its decision making. The Chinese central bank has been authorised to take climate considerations into account in its monetary decisions.
Central bank operations, therefore, cannot avoid affecting human rights.
The human rights responsibilities
The unavoidable impact of central banking operations on human rights means that central banks have to develop a better understanding of their human rights responsibilities. The applicable law is the starting point. But the relevant law and jurisprudence is unlikely to provide detailed guidance on how central banks should interpret and implement their human rights responsibilities.
A good reference tool for the central bank is the UN Guiding Principles on Business and Human Rights. These principles stipulate that all businesses should have a human rights policy. The policy should be publicly available and should be applicable to all the business’s operations and decision-making.
The Principles also state that businesses should conduct adequate human rights due diligence before and during their decision making and implementation process. This requirement means that they should conduct human rights impact assessments of their proposed operations. They should also take steps to avoid or mitigate the identified adverse human rights impacts.
Central banks will face particular challenges in meeting their human rights responsibilities. Their instrument independence means that their human rights policy will need to be respectful of the central bank’s independence and its mandate.
At the same time, the central bank needs to be cognisant of the fact that its human rights policy may have implications for other state entities and for the country’s political leadership. These considerations complicate but do not render impossible the task of drafting a central bank human rights policy.
Their ability to conduct detailed human rights impact assessments will be complicated by the relative speed and discretion with which they must often operate. This does not, however, make it impossible for them to assess their impact on human rights. Instead, it suggests that central banks need to develop and maintain a sufficiently detailed general and ongoing understanding of the actual impact of their operations on human rights. This is so that they can make informed judgements about the likely effects of their proposed monetary decisions on specific communities.
This disaggregated approach should provide central banks with a detailed and nuanced understanding of how their policies actually affect different sub-groups of their society. By doing this it should enable central banks to determine the true costs and benefits of their policies and actions. This should improve their decision-making.
Conclusion
According to Bradlow this analysis demonstrates three key points. First, it is becoming untenable for central banks to avoid incorporating their human rights impacts into their decision-making and operations. Second, a human rights approach offers central banks a new tool for understanding the true costs and benefits of their operations. Third, central banks can meet their human rights responsibilities without compromising the independence they need to meet their monetary and financial responsibilities.
Danny Bradlow, SARCHI Professor of International Development Law and African Economic Relations, University of Pretoria
Nigeria Customs Service (NCS) has imposed a three per cent surcharge on Deposit Money Banks (DMBs) over delays in the remittance of Customs revenue by designated banks.
The development was disclosed by Abdullahi Maiwada, national public relations officer of the Service, in a statement titled “Nigeria Customs Service Commences Enforcement of Penalties Against Designated Banks for Delayed Remittance of Customs Revenue.”
The agency stated that delays in remitting collected Customs revenue constitute a breach of remittance obligations and negatively impact the efficiency, transparency and integrity of government revenue administration.
Maiwada explained that any Designated Bank that fails to remit collected Customs revenue within the prescribed period will be liable to penalty interest, adding that affected banks will receive formal notifications detailing the delayed amount, applicable penalty and the timeline for settlement.
“The NCS has noted instances of delayed remittance of Customs revenue by some Designated Banks following reconciliation of collections processed through the B’Odogwu platform. Such delays constitute a breach of remittance obligations and negatively impact the efficiency, transparency and integrity of government revenue administration.
“In line with the provisions of the Service Level Agreement (SLA) executed between the Nigeria Customs Service and Designated Banks, the Service hereby notifies stakeholders of the commencement of enforcement actions against banks found to be in default of agreed remittance timelines.
“Accordingly, any Designated Bank that fails to remit collected Customs revenue within the prescribed period shall be liable to penalty interest calculated at three per cent above the prevailing Nigerian Interbank Offered Rate for the duration of the delay. Affected banks will receive formal notifications indicating the delayed amount, applicable penalty and the timeline for settlement.”
Maiwada further advised Designated Banks to strengthen their internal controls, ensure strict adherence to remittance timelines and comply fully with the provisions of the SLA.
He reiterated that the Service remains committed to enforcing accountability, safeguarding government revenue and promoting a transparent and predictable financial system in support of national economic development.
“The Service further notes that persistent or repeated non-compliance with the terms of the SLA may attract additional sanctions, including regulatory and administrative measures, as provided under the Agreement and relevant laws guiding Customs revenue collection.
“The NCS reiterates that prompt, accurate and complete remittance of Customs revenue is a fundamental obligation of Designated Banks. Any payment of collected revenue into unauthorised accounts, whether deliberate or erroneous, will be treated as a serious violation and addressed in accordance with the SLA and applicable legal frameworks.
“Designated Banks are therefore advised to strengthen internal controls, ensure strict adherence to remittance timelines and comply fully with the provisions of the SLA. The Service remains committed to enforcing accountability, safeguarding government revenue and promoting a transparent and predictable financial system in support of national economic development,” he added.
The World Bank is set to approve a $500m loan to Nigeria on Friday (today) as part of efforts to expand access to finance for micro, small and medium enterprises across the country, according to Punch.
The proposed facility, titled the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) Project, aims to mobilise private capital and promote innovative financial products for small businesses, according to information obtained from the World Bank.
Negotiations on the loan are ongoing, and approval by the World Bank Group’s board is expected on Friday.
The approval, expected on December 19, 2025, will see the World Bank commit $500m to the project out of an estimated total cost of $2.39bn.
Of the World Bank financing, $400m will be provided by the International Bank for Reconstruction and Development, while $100m will come from the International Development Association.
The Federal Government will be the borrower under the arrangement, with the Development Bank of Nigeria serving as the implementing agency with overall responsibility for managing the funds.
The remaining $1.89bn required for the project is expected to be provided by commercial lenders as unguaranteed financing.
According to the World Bank, the FINCLUDE project will leverage the platforms of the Development Bank of Nigeria and its subsidiary, Impact Credit Guarantee Limited, to deepen credit access for MSMEs.
“The proposed FINCLUDE Project leverages the platforms of the Development Bank of Nigeria and its subsidiary, the Impact Credit Guarantee Limited, to drive inclusive MSME finance,” a document from the World Bank read.
“Through these catalytic institutions, the project will deploy a package of complementary, inclusive, and innovative instruments tailored to the diverse needs of MSMEs in Nigeria.”
The World Bank described DBN as “a partner well known to the World Bank with high implementation capacity and a proven track record in designing and executing complex, innovative projects,” noting that its role would be central to the success of the intervention.
The project is structured around three main components. These include the provision of inclusive and innovative MSME finance products, the de-risking and mobilisation of private capital through partial credit guarantees, and technical assistance aimed at modernising and digitising Nigeria’s MSME finance ecosystem.
Under the first component, the World Bank said the project would provide Tier 2 subordinated capital to eligible financial institutions and support the establishment of an MSME investment fund to deliver equity and long-term debt financing to small businesses.
The bank said this approach would help “crowd-in private capital, test market innovations and promote financial sustainability” within the MSME segment.
Also, the project will offer targeted technical assistance to strengthen the capacity of financial institutions, improve regulatory oversight and modernise the MSME finance value chain linking DBN, lenders and entrepreneurs.
In its appraisal report, the World Bank highlighted Nigeria’s ongoing economic reforms, describing the country as being “in a critical transition.”
It noted that the removal of fuel and foreign exchange subsidies, alongside the unification of exchange rates, had begun to stabilise the economy and restore investor confidence.
“These reforms have improved fiscal space, enhanced FX liquidity, and eased inflation to 18 per cent as of September 2025,” the report stated, adding that growth prospects were strengthening, with the International Monetary Fund projecting 3.9 per cent real GDP growth in 2025.
Despite these improvements, the World Bank warned that access to finance remained uneven, particularly for MSMEs, women and the agriculture sector.
It noted that agriculture accounted for just over five per cent of total bank credit in 2024, while high interest rates and shallow credit penetration continued to constrain lending to smaller enterprises.
Fidelity Bank Plc has brought relief to indigent patients at the Enugu State University Teaching Hospital (ESUTH) Parklane, by offsetting medical bills and providing financial support to children battling chronic health conditions alongside donations of ante-natal kits to pregnant women.
L-R: Public Relations Officer, Enugu State University Teaching Hospital (ESUTH), Amarachi Amusi; Team Member, Optimizers Inductees Class of 2025, Precious Uchechi-Uneke; Class Governor, Optimizers Inductees Class of 2025, Chinedu Hilary-Elijah (both of Fidelity Bank Plc); Matron, Children’s Ward ESUTH, Esther Nnaji; and Team Lead, Corporate Social Responsibility (CSR), Fidelity Bank Plc, Victoria Abuka; during the Fidelity Helping Hands Program (FHHP) outreach to ESUTH recently.
The intervention, which was carried out under the bank’s Corporate Social Responsibility (CSR) initiative known as Fidelity Helping Hands Programme (FHHP), was funded and executed by newly inducted employees of the bank, the Optimizers Inductees Class, as their community impact project, with matching financial support from the bank.
Commenting on the outreach, Divisional Head, Brand and Communications Division, Fidelity Bank Plc, Dr Meksley Nwagboh, highlighted that the initiative underscores the bank’s commitment to improving lives through targeted social interventions across its four CSR pillars.
“This project reflects the spirit of who we are as a bank. Beyond providing financial services, we are committed to touching lives within the communities where we operate. Today, we are donating ante-natal kits to pregnant women and also supporting indigent patients who have remained in the hospital due to unpaid bills. Some of the children also require long-term medical care, so we have given additional financial support to aid their continued treatment,” Dr Nwagboh said.
Whilst wishing the beneficiaries quick recovery and good health, Nwagboh described the intervention as both significant and timely, enabling many families to reunite and celebrate the festive season without the burden of outstanding hospital debts.
Receiving the donation, the Chief Matron of the Children’s Ward, Esther Nnaji, commended Fidelity Bank for the timely intervention, describing it as a lifeline for families grappling with rising healthcare costs.
“There are so many families here in desperate need. Some of the children are battling cancer, sickle cell disease and other chronic conditions. Fidelity Bank’s support will go a long way in relieving their pain. Because of what you have done, some of these children will now be able to see their siblings again,” she said.
Several beneficiaries expressed deep gratitude to Fidelity Bank for easing their financial burdens. Mrs. Adaeze Ilo, whose baby’s bill was cleared, said the support came at a moment of despair.
“After spending months in the hospital, we had no idea how to raise the money,” she said. “Fidelity Bank came through for us when we needed it the most. We are deeply grateful.”
Another relieved parent, Jane Anthony, whose son’s bill was cleared, said her family had already accepted that they would spend Christmas in the hospital.
“God used Fidelity Bank to send us home to enjoy Christmas. My heart is full.” she said.
The recent outreach to Enugu State University Teaching Hospital further highlights Fidelity Bank’s continued commitment to supporting vulnerable groups and strengthening community well-being across Nigeria through community-driven CSR efforts.
Ranked among the best banks in Nigeria, Fidelity Bank Plc is a full-fledged Commercial Deposit Money Bank serving over 9.1 million customers through digital banking channels, its 255 business offices in Nigeria and United Kingdom subsidiary, FidBank UK Limited.
The Bank is a recipient of multiple local and international Awards, including the 2024 Excellence in Digital Transformation & MSME Banking Award by BusinessDay Banks and Financial Institutions (BAFI) Awards; the 2024 Most Innovative Mobile Banking Application award for its Fidelity Mobile App by Global Business Outlook, and the 2024 Most Innovative Investment Banking Service Provider award by Global Brands Magazine. Additionally, the Bank was recognized as the Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence and as the Export Financing Bank of the Year by the BusinessDay Banks and Financial Institutions (BAFI) Awards.
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