Mr. Yemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has announced plans to introduce a fresh set of foreign exchange laws and guidelines aimed at addressing the depreciation of the Naira and achieving stability in the exchange rate. Speaking at the 2023 Annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) on November 24, Cardoso also revealed the CBN’s intention to conduct a recapitalization exercise for the banking industry. This exercise would involve directing banks to increase their minimum capital base to a level that can adequately support the vision of a $1 trillion economy.
In his keynote speech, Cardoso outlined the monetary policies that the CBN will pursue, including the goals of achieving price stability, fostering sustainable economic growth, stabilizing the exchange rate of the Naira, and reducing interest rates to facilitate borrowing and investments in the real sector. He emphasized the importance of clear, transparent, and harmonized rules governing domestic and foreign currency markets.
Regarding the new foreign exchange guidelines and legislation, Cardoso highlighted that extensive consultations would be conducted with banks and FX market operators before implementing any new requirements. He acknowledged the need to assess the adequacy of the banking industry to serve the envisioned larger economy and stated that difficult decisions regarding capital adequacy would be made. As a first step, banks would be directed to increase their capital.
Cardoso also addressed the role of technology in delivering financial services and enhancing financial inclusion. He expressed concerns about recent developments in the payment services landscape and emphasized the need for a comprehensive review of the licensing framework for payment services. The Governor announced plans to engage in extensive consultations to develop a new regulatory and compliance framework suitable for the technology-driven payment services sector. Additionally, he warned that any intentional or unintended noncompliance by licensees would be subject to sanctions.
