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    HomeBusinessFG Lauds NDIC, CBN for Keeping Nigeria's Economy Afloat Despite Challenges

    FG Lauds NDIC, CBN for Keeping Nigeria’s Economy Afloat Despite Challenges

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    By Tony Obiechina, Abuja

    The Federal Government has commended the Nigeria Deposit Insurance Corporation ( NDIC) and the Central Bank of Nigeria (CBN) for keeping Nigeria’s economy afloat despite economic challenges.

    The Minister of finance, budget and national planning Mrs. Zainab Ahmed gave the commendation while declaring opening the 2022 International Association of Deposit Insurer ( IADI) Africa regional Committee workshop organised by the NDIC in Abuja on Tuesday.

    The theme of the 4-day workshop is: ‘‘Normality in Turbulent Periods: The Stabilizing Role of Deposit Insurance insurance’’.

    The Minister pointed out that Nigeria’s economy, like others, felt the brunt of the global economic distortion, having to slip into recession twice in the space of five years; noting that it was shielded by the resilience of the nation’s financial system, which made it came out from recession within months.

    She stated that despite challenges that assailed economy , no depositors’ fund was lost given the effectiveness of finance regulatory agencies, most especially the CBN and the NDIC.

    Speaking to the pivotal role of banking sector, she said , the sector remains pivotal in supporting the real economy through the provision of innovative products and services to all relevant stakeholders.

    However, she said fiduciary nature of banking business, coupled with increased social-economic challenges across the globe, had increased the risk of banks’ failure, with significant implications for depositors’ losses and erosion of public confidence in the banking system.

    “The negative impact of these challenges on economic growth and financial sector stability in most economies of the World, raised a number of questions concerning the role of Deposit Insurance Scheme ( DIS) in contributing to financial system stability.

    “It has equally demonstrated the important role played by the deposit insurance system, as a component of financial safety-net arrangements in most jurisdictions across the globe, given that, depositor protection is a critical element necessary for maintaining and restoring financial stability.

    “The Nigerian economy, like others, felt the brunt of the global economic distortion, having to go into recession twice in the space of five years. However, given the resilience of the nation’s financial system, we came out within months. We also make bold to say that despite these economic challenges, no depositors’ fund was lost given the effectiveness of our agencies, most especially the CBN and the NDIC”, she said.

    The Minister further noted that the choice of the theme was apt, instructive and germane in the light of recent socio-economic challenges that continued to undermine the safety and stability of the financial system across the globe, accentuated by the lingering effects of COVID-19 Pandemic, Russian-Ukraine war, global supply disruptions and climate change challenges.

    Mrs Ahmed who said these posed myriads of challenges and risks to the safety and stability of the global financial system, urged participants to do thorough discussion of more specific issues such as deposit insurer’s role in contingency planning and crisis management among others.

    In his good will message, CBN governor Mr. Godwin Emefiele said the regulatory agencies in Nigeria’s banking sector had in place, proactive mechanisms to deal with systemic problems in financial sector.
    He said CBN and NDIC worked in synergy in developing policy guidelines for banking sector protection .

    In her opening remarks, NDIC board Chairman, Mrs. Ronke Sokefun said the workshop was organized to serve as a forum to dissect pertinent issues, share experiences, compare notes and elevate participants understanding of the role of deposit insurers in early detection & timely intervention; contingency planning & crisis management; crisis simulation to strengthen operational resilience; and contingency planning framework for a safer, and more resilient financial system, that is supportive of sustainable economic growth in each jurisdiction.

    “The presence of global experts from both fiscal, monetary, supervisory and regulatory agencies, and Deposit Insurers in gathering like this, is a manifestation of our commitment towards having robust and sustainable system that can detects problem early enough and manage crisis adequately in the banking system to foster financial system stability”, she said.

    Managing Director/ CEO of NDIC Mr. Bello Hassan said NDIC provides deposit insurance protection to depositors of 33 Deposit Money Banks (DMBs) comprising
    24 commercial banks, 6 Merchant Banks and 3 Non-Interest Banks (NIBs) and
    882 Microfinance Banks (MFBs); 34 Primary Mortgage Banks (PMBs);
    3 Payment Service Banks (PSBs); and
    29 Mobile Money Schemes.

    He said the corporation adopted different resolution mechanisms in resolving the failure of distressed deposit-taking financial institutions in the country.

    “The liquidation activities of the NDIC involved 467 insured banks in-liquidation, comprising 49 DMBs, 367 MFBs, and 51 PMBs, at end-December 2021.

    “The successes recorded by the NDIC in the execution of its mandate, would
    not have been possible without the strong support and collaborative efforts of
    other financial safety-net players in Nigeria like the CBN, the Federal Ministry
    of Finance, Budget and National Planning and other members of the FSRCC”, he said.

    Hassan said NDIC is a member of the FSRCC, an inter-agency body set-up to coordinate the supervision of financial institutions and deal with matters of
    common interest and concern to the various regulatory and supervisory
    authorities in the Nigerian financial services industry.

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