Gov. Godwin Emefiele, CON
Keynote Address at the 56th CIBN Annual Bankers
Dinner
November 26th 2021
Lagos, Nigeria
_____________________________
(Protocols)
1. Good evening distinguished Ladies and
Gentlemen. And thank you very much for the
very warm reception accorded us here today.
By now, I am sure everyone knows how I feel
about this annual dinner, because since I
became Governor of the CBN over seven year
ago, this is perhaps the one event I have never
missed at all. So to underscore how important
this event is to me, today is my seventh
consecutive Keynote address at the Chartered
Institute of Bankers (CIBN) annual dinner.
2. It is therefore a great pleasure for me to be here
today because it provides a veritable platform
and a significant opportunity for me to engage
with all stakeholders especially, professionals,
practitioners and experts in the banking and
Finance community. This dinner is an occasion
to highlight important developments in our
economy and apprise you of the policy
initiatives and focus of the Central Bank of
Nigeria towards realizing the ultimate goals of
Macroeconomic and financial Stability.
3. I would like to specially thank the leadership
and fellows of the Chartered Institute of
Bankers of Nigeria led by its President, Mr.
Bayo Olugbemi, and its able Registrar, Mr.
Seye Awojobi for their painstaking efforts
towards the success of today's event. I also
want to extend my heartfelt gratitude to the
Managing Directors/Chief Executive Officers of
our banks and other financial institutions who
have found time to attend this dinner despite
their very busy schedules. Let me also welcome
my colleagues from the Central Bank of Nigeria,
especially the Deputy Governors, and other
senior management staff of the Bank present
here. I would also like to thank the audience
and members of the press for being a part of
today's beautiful event.
4. Distinguished Ladies and Gentlemen, in my
remarks today, I intend to provide my views on
developments in the Nigerian economy as well
as an outlook for how we see things going
forward. As will be expected from an incisive
analysis of any major economy in the world
today, let me begin with an initial background of
the Nigerian economy before COVID-19. Prior
to the start of the pandemic in 2019, our
economy was making steady progress out of
the difficulties from the global oil price vagaries
of the previous years. Indeed, our Gross
Domestic Product (GDP) growth rate for 2019
stood at 2.3 percent, on the back of a relatively
strong fourth quarter GDP of 2.55 percent that
year. This growth was accompanied by
significant foreign capital inflows due to
improved fundamentals of the economy.
Containing the Impact of COVID-19 on our
Economy
5. Distinguished Ladies and Gentlemen, then
came the pandemic in the first quarter of 2020
and indeed, it's been close to two years since
the onset of the COVID-19 pandemic and the
wide-ranging impact it has had on, not only the
global economy but also on the Nigerian
economy. We must all remember that, while its
economic damages have been enormous and
will be highlighted soon, this pandemic is first
and foremost a public health crisis, instigated
by a virus that has infected 259.7 million
people, and claimed the lives of 5.2 million
people globally, including 2,974 of our fellow
Nigerians and loved ones. Indeed, let me state
that in May 2020, it would have been unlikely to
hold an event such as this, with the number of
people we have at today's event. Our ability to
come together today is a reflection of the
progress that has been made in containing the
spread of the virus as well as in supporting
improved economic activity over the past two
years. In my remarks today, I intend to provide
my perspective on the external and domestic
impact of the pandemic and its attendant effects
on the Nigerian economy. I will also provide an
outlook for the Nigerian economy, as well as the
steps that the CBN is taking to support
improved economic activity.
Global Economy
6. As you may recall, 2020 was a year like no
other for the global economy and indeed the
Nigerian economy. The onset of the COVID-19
pandemic in the early part of 2020, and the
containment measures put in place to slow the
spread of virus, led to an unprecedented
decline in global growth, last seen since the
great depression of the 1930s. Most advanced
and developing economies fell into a recession,
which led to a significant contraction in global
growth by -3.1 percent in 2020. Global travel
was also restricted as countries shut down their
borders and restricted domestic and
international travels. According to the latest
Economic Impact Report by World Travel and
Tourism council, the global travel and tourism
sector lost about US$4.5 Trillion from the
effects of the travel restriction, quarantines and
other related measures. Also, according to the
International Labor Organization(ILO), in 2020
over 255 million full time jobs were lost as a
result of the pandemic.
MAJOR EVENTS DURING THE PANDEMIC.
7. Volatile crude oil Market
First, in view of the complete stoppage of global
economic activities, we witnessed the
significant reduction in the demand for, and
price of crude oil, Nigeria's main source of
foreign exchange receipts and fiscal revenue.
Indeed, the price of crude oil fell by more than
70 percent at some point. We witnessed the fall
in crude oil prices from a high of $68 per barrel
in January 2020 to $24 per Barrel in April 2020.
Put succinctly, as of 20th April of 2020, the price
of some streams of crude oil fell below zero
dollars per barrel, as producers were forced to
pay buyers for overwhelmed storage facilities.
This fall had adverse implications on the supply
of foreign exchange into the country, as well as
on government revenues.
Deteriorating Global Financial Conditions.
8. Second, the global financial conditions
tightened as investors withdrew over $120
billion in portfolio flows from emerging and
frontier market countries in the first half of 2020.
While flows began to recover in the early part of
2021, financial flows to emerging markets like
Nigeria, are constrained by expected tapering
by the Federal Reserve Bank in 2022, which is
likely to affect global financial conditions. In
essence, uncertainty about the evolution of the
virus, and the extent of its impact, led to a
retreat in investment from emerging markets,
and a corresponding rise in investment in safe
haven assets, such as gold, and US Treasury
bills. The resulting outflow further heightened
pressures on the currencies of major emerging
market countries like Nigeria, and this
ultimately resulted in the adjustments of our
exchange rate.
9. Global spike in Food prices.
Third, following the provision of vaccines,
countries began to ease movement restrictions
and demand in certain sectors began to recover
to pre-covid levels. Unfortunately, the surge in
demand, has contributed to significant supply
chain disruptions, which has contributed to
elevated inflation in advanced and developing
markets. For example, the FAO food price
index which measures monthly change in
international prices of a basket of food
commodities, in October 2021, stood at its
highest level since July 2011, because of the
initially exogenous supply disruption I am about
to describe.
Deglobalisation and Supply Disruptions.
Finally, tragic as these outcomes were, even
more alarming was the reaction of many
countries at the height of the pandemic. All over
the world, countries responded by fighting for
themselves and taking measures to protect
their own people, regardless of the spillover
effects on the rest of the world. According to the
World Customs organization, a total of 32
countries and territories adopted stringent and
immediate export restrictions on critical medical
supplies and drugs that were specifically meant
to respond to COVID-19. As of 4th April 2020,
an updated count of total number of export
restrictions by the Global Trade Alert Team at
the University of Gallen, Switzerland suggest a
total of 102 restrictions by 75 countries.
10.On March 4th 2020, Germany announced an
export ban that applied to all sorts of medical
protection gear including breathing masks,
medical gloves and protective suits. Around the
same time, President Macron announced that
France will requisition all face masks produced
in the country, a de facto export ban. Between
8th February 2020 and 6th April 2020, india
released eight (8) different export notifications
banning several drugs and medical supplies
including Hydroxylchloroquine, ventilators,
Oxygen therapy apparatus, and breathing
devices.
11.Also, due to fears of global recession, there
were worries about unprecedented global food
insecurity, with concerns that agricultural
production may be dislocated by containment
measures that constrain workers from planting,
managing and harvesting critical crops.
Consequently, rather than seek cooperative
and global solutions, several countries resorted
to export restrictions of critical agricultural
produce. Indeed, according to the International
Food Policy Research Institute (IFPRI), about
37 countries enacted various forms of food
export restrictions in response to COVID-19,
even in countries where average production
exceeds domestic consumption. For example,
Vietnam, the world's third largest exporter of
Rice, suspended granting rice export
certificates until the country reviews domestic
inventories. Russia, the world's largest wheat
exporter, announced a ten-day ban on the
export of buckwheat and rice due to concerns
over panic buying in local supermarkets.
12. The dire implications of these events should
not be lost on anyone; and in fact on Nigeria, a
country with over 200 million population. As I've
asked in some of my recent treatise on the
opportunities of the pandemic, what if the
pandemic occurs again and we witness an
extended restriction in movements and export
bans? What if these restrictions become a new
normal? What if another pandemic occurs in
which all borders are closed, with food and
medical imports significantly curtailed? What if
the rich among us, even when they can afford
to pay for their medical bills abroad, cannot
travel out of our shores because of these
extended lockdowns? Are we going to allow our
hospitals to remain in their current state without
equipment and state of the art facilities? For
how long shall we continue to rely on the world
anything and everything?
Global Response
13.In a bid to contain the spread of the virus as
well as to support the recovery of the global
economy, there was an unprecedented
deployment of fiscal and monetary support
measures by countries, even though there was a
significant divergence in the force of the response
between advanced and developing countries. In
2020, advanced economies on average were
able to deploy about 28 percent of their GDP in
fiscal and monetary policy measures, compared
with only 6 percent in emerging markets and less
1
than 2 percent in low-income countries. For
example the US Federal Reserve increased its
balance sheet from $4.1 trillion in January 2020
to over $8.6 trillion by October 2021.While the
ECB increased its balance sheet from $5.1 to 9.6
trillion dollars over the same time period. By the
end of 2020, the Fed's balance sheet was 34% of
GDP, the ECB's 59%, the Bank of England's
40%, and the Bank of Japan's 127%. While
measures were deployed by developing and
emerging market economies to support recovery
efforts, their response was limited due to
constrained fiscal and monetary space relative to
their counterparts in advanced countries.
14. The impact of accommodative fiscal and
monetary support, in addition to the deployment of
COVID-19 vaccines, and the easing of restrictions
on movement, helped to support a significant
recovery in global growth, which is expected to rise
by 5.9 percent in 2021 up from -3.1 percent in 2020.
Uneven Recovery
15.The recovery of the global economy however
has been uneven given the wide divergence in
accommodative policy measures and vaccine
deployment by advanced countries relative to
developing countries. While advanced countries
are expected to grow by 5.2 percent in 2021, growth
in Sub Saharan Africa is projected at 3.6 percent in
2021. In advanced countries like the United States
and the United Kingdom, over 60 percent of their
population have been fully vaccinated, and efforts
are underway in deploying a third dose to their
citizens. We also witnessed how some advanced
countries-imposed export restrictions on vaccines
until a significant proportion of their population had
been vaccinated. However, in Africa, less than 5
percent of the total population by October 2021 had
been fully vaccinated.
Furthermore, the global economy has been affected
by rising inflation and supply chain disruptions. The
swift recovery in global demand was not followed by
a corresponding rise in supply of goods and
services, which not only heightened inflationary
pressures, but also contributed to significant supply
disruptions. Average Intercontinental freight rates
for a 40ft container, rose from $1,500 in January
2020 to over $10,000 by September 2021. The rise
in freight rate along with demand pressures also
helped to support a significant rise in food prices.
Reflecting this pressure, the FAO Food Price Index
stood at its highest level in October 2021, since July
2011. Inflationary pressures in advanced and
developing economies have been aggravated by
rising commodity prices such as crude oil, which
would likely reshape the accommodative monetary
stance of major central banks in 2022. Curtailing
inflation and supply disruptions are key to
supporting continued recovery of the global
economy in 2022.
Impact on Nigeria's Economy
16. In Nigeria, the impact of these external
factors as a result of the COVID-19 pandemic,
have also worked to shape developments in
our economy over the past year. Given our
reliance on revenues from the export of
commodities, such as crude oil, the fall in
crude oil prices from a high of $68 per barrel in
January 2020 to $24 per barrel in April 2020
had adverse implications on the supply of
foreign exchange into the country, as well as
on government revenues. While oil prices have
risen to close to $80 today, OPEC restrictions
on our production output along with the rising
cost of petroleum imports have prevented us
from being able to harness the gains from the
rise in crude oil prices.
Exchange Rate
17. As a result of the drop in foreign exchange
supply arising from low earnings from the sale
of crude oil, the naira depreciated by 7.7
percent from N380/$ to 410/$ at the I & E
window. Supply was also affected by massive
outflow of foreign portfolio investments from
Emerging and Frontier Markets including
Nigeria in 2020. A combination of these factors
led to a marked drop in our foreign reserves
from nearly $36.7bn at the beginning of the
crises in March 2020, to a low of $32.9bn in
June 2021. It is important to state that the
volume of activities at the I&E window fell from
nearly $250 - 300 million daily to less than $40
million in the first quarter of 2021.
Supply Disruptions and Inflation
18. Third, the imposition of containment
measures as well as the rising cost of imported
goods due to supply disruptions helped to
aggravate inflationary pressures in the 2nd
half
of 2020. Our inflation rate rose from 12.12
percent in January 2020 to 18.17 percent in
March 2021. Part of the rise in inflation was
due to the surge in demand that arose from the
easing of restrictions on movements, which led
to a growing disparity between demand orders
and output from factories and farms, not only
in Nigeria but in other parts of the world.
Heightened demand along with adjustments in
the exchange rate, farmer herder clashes,
imported inflation, insecurity in parts of the
food belt region, and rising transportation cost,
were some of the other key factors that drove
the rise in inflation.
19. Consequently, the pandemic and its
attendant effects re-ordered the paths of our
key macroeconomic and financial indicators
after the gains we had achieved following the
impact of the 2015 - 2017 oil price crisis. As a
result of these effects the Nigerian economy
fell into a second recession in four years, in
the 3rd quarter of 2020.
20. However, the banking sector remained
robust and sound due to prompt response by
the Central Bank in order to prevent an
economic crisis from spilling over into a
financial crisis. As result, the banking sector
continued to consolidate on the gains of the
recovery from the 2016 & 2017 recession.
Although we saw some fragilities in the
system, they constituted limited risks.
Prudential indicators such as NPLs stood at
5.4 percent in November 2021, while the CAR
remained above 15 percent indicating
continued resilience of our banking system.
Response of the Monetary Authorities
21. The impact of the COVID-19 pandemic
provided many lessons that has helped to
shape subsequent actions by the Monetary
Policy authorities. For example, we realized
how vulnerable our economy was relative to
advanced markets in not only access to
essential medical supplies, but in the form of
monetary policy support that Central Banks in
developing countries could provide in
supporting the recovery of their respective
economies. Rather than let the crisis
compound our problems, we reflected on ways
in which we could turn the crisis into an
opportunity. One that would reset the trajectory
of our economy from its dependence on
imported items to one that is more resilient and
productive.
22. With the pace at which viruses spread,
which could significantly derail economic
growth, we were further emboldened to work
on measures that would improve productivity,
support employment generation and
strengthen the resilience of our economy to
external shocks.
23. As a result, working with the fiscal
authorities, we took unprecedented measures
to contain the effects of the pandemic on our
economy, in addition to other efforts aimed at
stimulating greater economic activity in key
sectors of our economy. Please permit me to
highlight some of the steps we took towards
achieving our mandated goals.
Containing the Impact of COVID-19
24. First, the Central Bank of Nigeria worked
with the fiscal authorities in instituting strong
policy support measures capped under the
Economic Sustainability Plan (ESP), which
was designed to contain the effects of the
pandemic, restore stability to the economy by
helping households and businesses affected
by the pandemic and to lift our economy out of
the woods through massive interventions to
critical sectors.
25. Under this plan, the monetary and fiscal
authorities collectively mobilized and injected
over N5trillion to support households and
businesses. It is gratifying to state that the
Central Bank of Nigeria deployed more than
N3.5trillion, - about 4.1 percent of Nigeria's
GDP to critical sectors such as agriculture,
manufacturing, electricity, and healthcare in
order to stimulate and help the economy
recover from the deep shock. Other specific
policy measures undertaken include.
a) Reduction of the monetary policy rate from
13.5 to 11.5 percent to improve the flow of
credit to households and businesses.
b) Reduction of the interest rate on CBN
intervention loans from 9 to 5 percent.
c) Extension of the moratorium on principal
repayments for CBN intervention facility to
March 2022.
d) Granted regulatory forbearance that allow
banks restructure loans given to sectors
severely affected by the pandemic.
e) Strengthened the Loan to Deposit ratio
policy, which has resulted in a significant rise
in loans provided by financial institutions.
Total gross credit rose by over 21.1 percent
over the past year, from N19.4 trillion to
N23.5 trillion.
f) Created a N50 billion target credit facility for
affected households and small and medium
enterprises through the Nirsal Microfinance
Bank, against which N363.5 billion has been
disbursed to over 767,000 Nigerian
households and micro businesses.
g) Mobilized key stakeholders in the Nigerian
economy, under the Private Sector Coalition
Against COVID-19 (CACOVID) team that
raised N39.646 to support the fight against
the scourge. The funds were used to support
three (3) key priority areas:(i) development of
39 fully equipped isolation centres including
Intensive Care Units (ICUs) and molecular
testing labs and procurement of medical
equipment such as PCR test kits across the
country; (ii) provision of palliatives in the form
of essential food items to 1.7 million
households, an equivalent of 8 million
Nigerians; and (iii) improving awareness in
rural awareness on the COVID-19 virus and
capacity building for community health
workers.
h) Created a N1 trillion facility in loans to boost
local manufacturing and production across
critical sectors; of which 53 major
manufacturing projects, 21 agriculture related
projects and 13 service projects are being
funded from this facility.
i) Creation of a NGN100 billion intervention
fund for pharmaceutical companies and
healthcare practitioners to expand and
strengthen the capacity of our healthcare
institutions. We have increased this fund to
N200 billion to accommodate more players in
the healthcare sector, such as phytomedicine
practitioners and manufacturers of medical
devices and vaccines. Our primary focus is to
create a hub where medical officers can have
access to diagnostic equipment to carry out
quality medical services at an affordable price
for Nigerians.
So far, over N107.7 billion has been
▪
released to support 114 healthcare projects,
including six (6) greenfield (new) and 108 are
expansionary (brownfield). The projects
financed included cancer treatment centres,
medical diagnostics, pharmaceuticals, dental
services, eye clinics, and other healthcare
service providers. We are happy to inform you
that the intervention programs have contributed
to the increased bed space in our hospitals, and
improved healthcare productivity as evident in
the increased number of successfully treated
Covid 19 patients.
26. These developmental initiatives combined
with our monetary and financial policies have
helped to support the recovery of our economy
and in re-aligning general macroeconomic
conditions.
The Journey so far and our scorecard
27. As a result of these measures, we
witnessed robust economic recovery as GDP
growth stood at 4.03% in the 3rd quarter of
2021, following the 5.01% growth recorded in
the 2nd Quarter of 2021. The economy has
remained on a positive growth path for four
consecutive quarters after the recession in the
3rd quarter of 2020. 41 out of the 46 sectors
assessed in the 3rd quarter by NBS, recorded
positive growth, as growth was driven by
significant improvements in the non-oil sector,
particularly, Agriculture Manufacturing, Trade,
ICT, Construction, Finance and
Transportation. We have also witnessed a
gradual recovery in manufacturing output
growth as the Manufacturing PMI index rose to
47.3 points in October 2021 from 44.9 in
January 2021.
28. Our interventions particularly in the
manufacturing and the agriculture sectors
significantly helped to encourage continuous
improvements in growth in these two key
sectors of our economy. Today, our food
production systems have become more
sustainable due to the improved output at our
farms and local factories. Output of staple
commodities such as rice, maize, palm oil and
tomatoes have grown significantly, and we
have also seen increased efforts of our local
manufacturing firms to engage in backward
integration efforts. Second, a visit to any major
retail chain will reveal an increasing number of
high quality made in Nigeria products relative
to imported goods, which is helping to increase
domestic production, generate employment
and wealth in our country. If these intervention
efforts were not carried out by the monetary
and fiscal authorities, our economy would have
been in a grim state.
Inflation
29. Inflation has continued to moderate for
seven consecutive months, as it declined from
18.17 percent in March 2021 to 15.9 percent in
October 2021 supported by improved output of
staple food items. Inflation however still
remains above our benchmark, which means
efforts must continue to be made to slow down
the pace of the rise in prices.
External Reserves
30. Supported by our demand management
policy, in addition to support from the
successful issuance of the $4bn Eurobond and
the IMF SDR, our external reserves today
stands at over $41.4bn which is enough to
support 9 months of imports. This is not just a
morale booster for both foreign direct and
portfolio investors willing to invest in the
economy, but it provides significant fire power
to support our domestic industries that need to
import critical machines and equipment for
domestic production and exports
Exchange Rate
31. As a result of our demand management
policy, the naira has remained largely stable
around N411/US$1 at the I&E window
particularly since the discontinuation of FX
allocation to Bureau De Change operators
along with the convergence between the CBN
and NAFEX rates. Banks are now able to meet
the demands of their customers seeking forex
for SMEs, school fees, medical and PTAs,
which has reduced the need of customers to
rely on alternative providers of foreign
exchange. Average daily Fx turnover at the
I&E window is now over $250million, up from
$40million in April 2020.
32. Our current account deficit has narrowed
significantly, from a huge deficit of 4.53% of
GDP in the 4th quarter of 2020 to negative
0.44% of GDP in the 2nd quarter of 2021 due to
a surplus position in the goods account. The
surplus position in the goods account is due to
a reduction in imports, increase in crude oil and
gas export receipts, and improvement in
remittance inflows. Remittance inflows have
been supported by our naira for dollar
program, and we have seen a surge in
remittance inflows from over $5m per week in
June 2020 to over $100m per week in October
2021.
Outlook
33. Following the impact of the various
accommodative policy measures, our
economy made a swift exit from the recession.
Unlike the five quarters it took to exit the
previous recession, the economy rebounded
after just two quarters of contractions,
underpinning the resilience of the economy
amid greater policy support. I am pleased to
note that growth has returned to pre-covid
levels due to the accommodative policy
support provided by the monetary and fiscal
authorities.
34. Although uncertainties remain around the
mutating Delta virus, prospects of a
broadbased economic recovery in Nigeria remain
bright as efforts are made to improve access
to vaccines for Nigerians, in addition to
measures aimed at implementing safety
protocols to curb the spread of the virus.
35. As a result of these growth enhancing
policy measures, we project that GDP will grow
at 3.0 percent for 2021 up from -1.8 percent in
2020. Inflation is expected to continue on its
downward trajectory into 2022 as continued
interventions along with the onset of the
harvest season aid improved supply of food
items, which would further help to decelerate
inflationary pressures.
Policy Focus in 2022
36. I would like to state that notwithstanding
these positive indicators, our economic growth
remains fragile, as our unemployment and
inflation rate remain at levels that are not very
supportive of growth. Second, continued
implementation of our intervention efforts
would need to be undertaken to sustain the
recovery efforts and stimulate further growth of
the economy. Third, given population growth at
about 2.7 percent annually, it is important that
we continue to deploy measures that will
enable our economy to attain annual growth
rates of over 5 percent.
37. Through the pandemic we are aware that
our policy responses are often more effective
when we work with the private sector. For
example, the CACOVID alliance played an
instrumental role in reducing the negative
effects of the pandemic, by providing palliative
support to families affected by the virus and in
rebuilding our healthcare institutions.
Leveraging the strength of the private sector
will be critical in mobilizing funds that are
needed toward building a more resilient and
stronger economy. We intend to strengthen
collaborations with the private sector in order
to support investments in critical sectors such
as infrastructure, and ICT, in addition to
ongoing efforts to build a stronger agriculture
and manufacturing base in Nigeria.
38. As a result, all efforts in 2022 must be made
to ensure that we maintain our focus on
improving access to finance and credit for
households and businesses, mobilizing
investment to boost domestic productivity,
enabling faster growth of non-oil exports, and
supporting employment generating activities.
100 by 100
39. In an effort to implement policies that would
engender growth and employment, the Central
Bank of Nigeria, recently unveiled the 100 for
100 policy on production and productivity.
Under this program, targeted credit of up to
N5bn will be provided to 100 firms every 100
days, provided that these firms are investing in
projects that are greenfield projects. Second,
projects will be assessed on their ability to
generate significant employment opportunities
in critical sectors of our economy. Third,
eligible firms must show evidence of their
efforts to harness available local raw materials
towards the realization of their intended
investment. Efforts will also be made to
support firms that are geared towards
producing goods for the export market. The
Central Bank of Nigeria is committed to
supporting eligible firms with foreign exchange
to import machineries and equipment. Let me
add that routine audits will be conducted on
firms that receive funding, to ensure that they
are complying with the terms of the program.
We believe this program will significantly help
to catalyze growth in critical sectors of our
economy, while aiding our efforts to create
employment opportunities and reduce our
dependence on imported goods.
Supporting the Growth of the Digital
Economy
40. A key focus of the Central Bank of Nigeria
under my leadership has been enabling the
buildout of a robust payment system in Nigeria,
that will provide cheap, efficient, and faster
means of conducting payments for most
Nigerians. With the growing pace of digitization
globally, it is essential that we leverage digital
channels in fulfilling this objective. Total
transaction volumes using digital channels
more than doubled between 2018 and 2020,
as volumes rose from 1.3bn to over 3.3bn
financial transactions in 2020. Digital payment
channels also help to support continued
conduct of business activities during the
lockdown. Our robust payment system has
continued to evolve towards meeting the
needs of households and businesses in
Nigeria. Reflective of the confidence in our
payment system, between 2015 and
September 2021, about $900m has been
invested in firms run by Nigerian founders.
41. Notwithstanding these gains, close to 36
percent of adult Nigerians do not have access
to financial services. Improving access to
finance for individuals and businesses through
digital channels can help to improve financial
inclusion, lower the cost of transactions, and
increase the flow of credit to households and
businesses.
E-Naira
42. It is in this vein that the Central Bank of
Nigeria recently deployed the first central bank
digital currency in Africa, the E-Naira, which
would help in attaining our goals of fostering
greater inclusion using digital channels,
supporting cross border payments for
businesses and firms, and providing a reliable
channel for remittance inflows into the country.
The E-Naira will ensure that Nigerians in
remote areas can conduct financial activities
using their digital devices at little or no cost. It
will also help to strengthen the effectiveness of
government intervention programs, as funds
provided will get to the intended beneficiaries.
In less than 4 weeks since its launch almost
600,000 downloads of the e-naira application
have taken place. Efforts are ongoing to
encourage faster adoption of the e-naira by
Nigerians who do not have smartphones. The
support of the financial industry will be critical
in the ongoing deployment of the e-naira and
efforts are on-going to encourage continued
partnership between the CBN and
stakeholders in the financial industry.
Infrastructure Finance
43. With the decline in revenues due to federal
and state government as a result of reduced
receipts from the sale of crude oil, alternative
ways of funding infrastructure are critical if we
are to ensure sustained growth of our
economy. As we are all aware, the cost of
l