rate has remained stable ( with steady appreciation of naira against the dollar ) since 2004, and the gdp has maintained a robust growth rate of over 6 % per annum since 2003. iii : matters arising and challenges ahead despite progress on a number of fronts, there are still enormous challenges and unfinished business. at the economy - wide level, there are still chronic challenges of insecurity of lives and property, infrastructure deficiency ( especially power and transportation ), education crisis, among others. at the level of the financial system, we have the huge task of effectively implementing the fss 2020. there is still the risk of fiscal dominance and volatility in the fiscal operations of government. evolving fiscal responsibility arrangements and framework for managing highly volatile oil revenues will be critical. other unfinished business in the reforms includes : • risk - based, consolidated and strengthened banking supervision • mortgage, sme, and consumer credit reforms • adherence of states and lgs to the requirement under the micro finance policy to devote at least 1 percent of their annual budget to micro credit • continued reform of the payments system, especially the e - payments system and enforcement of the dud cheque offences act. efforts will continue to be made to address these unfinished issues. iv : the strategic agenda the thrust of the agenda focuses on the naira as our national currency – to realign its denominations, ensure its stability and global integration. these will help to deepen the reforms of the financial system and national economy, and make the naira the currency of reference in africa thereby facilitating our quest for international financial status. the new focus is an extension of our previous currency redesign and re - issuance of the lower denominations and attempt to re - introduce coins. our goals were to redesign the currencies after 23 years ( contrary to the international norm of currency redesign after 6 - 8 years ), drive down the cost of currency printing and experiment with the polymer substrate. our objectives are largely achieved and we have learnt a lot from the exercise. however, in the light of the new mandate by the cbn act ( 2007 ) to “ ensure monetary and price stability ”, as well as the vision articulated under the fss 2020, it has become imperative for us to evolve a more comprehensive strategy for the naira as a reference currency. currency redenomination and liberalization are not without risks especially for small open economies such as nigeria. however, we believe that the time is auspicious for such reforms especially in the light of the following enabling

development has a positive impact on growth. well functioning financial systems are able to mobilize household savings, allocate resources efficiently, diversify risk, and enhance the flow of liquidity, reduce information asymmetry and transaction cost and provide an alternative to raising funds through individual savings and retained earnings. these functions suggest that financial development has a positive impact on growth. 5. ladies and gentlemen, for many of you here, i may be stating the obvious, by highlighting the central role that banks play in the development of every economy by mobilizing resources for productive investments and being the conduit for the implementation of monetary policy. yet, i have given this the emphasis it requires. due to the critical nature of these roles, and the fact that the ability of banks to effectively impact on economic development hinges largely on their soundness and efficiency, governments across the world continue to take variety of measures to safeguard the banking sector through reforms. such reforms often focus on increased risk management procedures and enhanced corporate bis central bankers ’ speeches governance in order to strengthen and reposition the banking industry to enable it contribute effectively to the development of the real sector through its intermediation process. in addition, such reforms may involve a comprehensive process of substantially improving the regulatory and surveillance framework ; fostering healthy competition in banking operations, ensuring an efficient framework for monetary management, expansion of savings mobilization base, enforcement of capital adequacy, and the promotion of investment and growth through market - based interest rates. the need for reforms on an on - going basis has become more imperative with the increasing sophistication of the global financial products. the recent experience from the global financial crisis has further underscored the imperatives for countries to embark on banking reforms on a regular basis. 6. ladies and gentlemen, the process of reforming a financial sector usually involves the movement from an initial situation of controlled interest rates, poorly developed money and securities market and under - developed banking system, towards a situation of flexible interest rates, an expanded role for market forces in resource allocation, increased autonomy for the central bank and a deepening of the money and capital markets. it would indeed be difficult to define the components of “ good ” banking sector reform in absolute terms. generally speaking, good reforms would engender clear market entry and exit conditions ; ensure the ability of banks to function according to market principles without state intervention in their decision - making ; guarantee central bank independence and establish independent banking oversight. this means that reform in the