Nigeria’s banks have been through some challenging times in recent years, but for all their travails, they have turned in an impressive performance and continue to present a compelling narrative to foreign investors. However, the challenging times are not over just yet. West Africa’s largest banking sector – accounting for74% of regional banking assets and now fully recovered from its last crisis in 2009 – is facing structural changes that affect its traditional profitability drivers. The recent benchmark interest rate hike by the Central Bank of Nigeria, to 13%, and the devaluation of the naira, down by nearly 30% in just three months to $1:N198, are likely to affect debt servicing on loans denominated in foreign currency. As banks increase their exposure to large corporate deals at ever slimmer margins, they are being prodded to expand their retail and SME loan books to offset drops in traditional revenue streams. The resolution of the last banking crisis, and likely arrival of new players, should boost competition and prompt lenders to develop the data ecosystems needed to tap the retail market.

This chapter contains a viewpoint from Godwin Emefiele, Governor, Central Bank of Nigeria (CBN), and an interview with Daniel Monehin, Division President, Sub-Saharan Africa, MasterCard.

Cover of The Report: Nigeria 2015

The Report

This chapter is from the Nigeria 2015 report. Explore other chapters from this report.

Interviews & Viewpoints

Sketch of Godwin Emefiele, Governor, Central Bank of Nigeria (CBN), on the bank’s role in driving growth in specific sectors
Godwin Emefiele, Governor, Central Bank of Nigeria (CBN), on the bank’s role in driving growth in specific sectors: Viewpoint

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