Financial Services
From The Report: Nigeria 2022
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Both Nigeria’s banking system and capital markets have seen significant changes over the course of recent years. Indeed, measures implemented in 2020 to restructure loans, enhance oversight and boost accountability are expected to create stronger sector players in the longer term. Meanwhile, an ongoing focus on financial inclusion has led to the emergence of new segments, including non-interest finance, microbanks, bancassurance and payment service banks. However, the economic effects of the Covid-19 pandemic are still expected to affect the banking system in the short term, including loan quality, profitability and currency stability. Even so, the Central Bank of Nigeria has identified banks as key players in a sustainable recovery due to their ability to strategically allocate credit to fuel widespread growth. Meanwhile, continued steps towards demutualisation and the launch of the Growth Board in 2020 will make the Nigerian Stock Exchange more competitive. The wider investment landscape is also set to benefit from ongoing efforts to bolster financial inclusion and promote awareness of the advantages of capital markets as an alternative to conventional banking when it comes to funding business expansion and growing and preserving individual wealth.

This chapter contains an interview with Samaila Zubairu, CEO of Africa Finance Corporation.

Articles from this Chapter

Overview

Broader base: Supporting financial service providers beyond commercial banks is central to efforts to enhance financial inclusion
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Nigeria’s banking sector is highly diverse, with large players that follow a universal banking model and smaller actors that cater to certain niches. A regulatory push to consolidate the sector has helped to deepen banks’ ability to lend and fuel economic expansion – an important role for the sector to continue to play as the country recovers from the Covid-19 pandemic. Meanwhile, an ongoing focus on financial inclusion has led to the emergence of new segments, including non-interest finance,…

Interview

Financing development: Samaila Zubairu, CEO, Africa Finance Corporation, on mobilising private sector investment in targeted areas
OBG
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Interview: Samaila Zubairu To what degree is attracting private capital for infrastructure important to the economy? SAMAILA ZUBAIRU: Once the infrastructure and transport deficit is bridged, there is no doubt that Nigeria will be able to accelerate its GDP growth, as we have seen this happen in other countries such as China and Brazil. The infrastructure issues that must be addressed as a country are related to energy and transport. It is important that expenditure on infrastructure projects is…

Analysis

Targeted measures: Strategies to facilitate loan recovery and shift growth-oriented financing to critical sectors of the economy
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The authorities have been working for years to ease the burden of non-performing loans (NPLs) on the financial system. In 2009, in part due to the global financial crisis, the Central Bank of Nigeria (CBN) bailed out eight distressed lenders by injecting $4bn into the market. The Asset Management Corporation of Nigeria (AMCON) was formed the following year to recapitalise distressed banks and provide a venue to sell off NPLs. As of November 2020 AMCON had taken over N3.7trn ($9.9bn) worth of bad…

Overview

Market fundamentals: New tradeable instruments, the launch of the specialised Growth Board and further steps towards exchange demutualisation
OBG
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Nigeria’s capital markets ecosystem has made significant developmental progress in the last 10 years by growing the type of tradeable instruments and number of platforms available to carry out activity, which has brought more investors to the market. The years since 2017 have seen a particular push to diversify and strengthen the markets, and while participation remains low relative to the country’s large population, the sector is becoming increasingly sophisticated in terms of regulation and…