Nigeria’s economic crisis needs bold, persistent strategy – Emefiele

Ebun Francis

Godwin Emefiele, The Governor of Nigeria’s Central Bank on Thursday urged economy managers in the country to be bold and persistent in finding lasting solutions to the problems facing the the nations economy. Emefiele spoke at the 35th quarterly general meeting of the Association of Chief Audit Executives of Banks in Nigeria, in Lagos.

Speaking on the theme: “Changing Business Environment: The Role of Internal Auditors” the Apex Bank Governor stated that Nigeria was at a very critical state of deep economic recession occasioned by drastic fall in crude oil prices and devastating militancy attacks of oil facilities in the Niger Delta region, South, South Nigeria.

According to Emefiele, “The price of oil which is our main source of foreign exchange earnings and government revenue has significantly reduced, and may remain so for a long time. Money is scare for most citizens. Regrettably, because our economy is still largely import-dependent, this fuels the general rise in the prices of goods and services.  Hence, there is a noticeable decline in the purchasing power of the people. Indeed, there are many challenges. But, I also see opportunities.”

“That is why the Federal Government and the CBN is constantly formulating and re-evaluating policies that we believe will set us on the path of greater economic prosperity. Where and when necessary, we must remain bold and persistent, and never afraid to try new ideas, as these are major requirements in a time of change. That is why I am confident that Nigeria will overcome our current challenges. But, I suspect that we can only overcome these challenges if we are ready to make fundamental change in many of our attitudes, orientations and practices,” he continued.

The CBN Governor further stated that the needed fundamental change required to take the country out of the wood will have to start from the CBN as the nation’s lender of last resort and the banking sector regulator; the Deposit Money Banks (DMB’s) and other financial institutions.

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“For you as internal auditors, the changes may seem slow or rapid; they may be merely procedural or at times they may be radical. Whatever may be the case, the cumulative effect of change is to alter the business environment in which you serve. As a concomitant, you must also upgrade your capacities, operations and methods. If you do not do that, you will become victims of change. Therefore, you have a choice to either treat this gathering as a mere quarterly routine or treat is as an opportunity to analyze and prepare for the future. Let me explain why I hope you should choose the latter,” he stated.

Going forward, he urged the auditors to understand that banking industry is built on people and driven by services and technology. “People and organizations are becoming increasingly sophisticated. Their needs are more diverse and so are the services and the technologies to meet those needs. Indeed, technology is dramatically changing the face and environment of banking. Transactions of high volume and value are consummated with the click of a button”.

“Similarly, transactions are conducted simultaneously in multiple jurisdictions, across boundaries and time zones. As a result, efficiency has grown exponentially. As a corollary, the risks of doing business are equally high. The possibility that a careless mistake, let alone a fraud, can destabilize an entire institution and have systemic effects on the industry should be of concern to all of us.  This should be more so at a time of economic fragility. That is why you must stay ahead of the curve and be on top of your game,” he said.

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“Banks must maintain good internal control, ethical practice and sound risk management. Nigerians expect this, especially at a time of challenging operating environment.  All banks must be healthy and stress-free, so that they can absorb any unexpected shocks.  Therefore all the necessary measures for capital adequacy and indices of sound risk management must be in place and fully enforced. As internal auditors, you must all be proactive, look out for any factors that could destabilize the system, quickly identify and deal with them. You must pay particular attention to banks and customers operating in risk-prone and highly volatile sectors of the economy,” the CBN Governor stressed.

He therefore urged the auditors to be vigilant and guard against fraud.  “For the sake of emphasis, I would like to specifically cast your minds to the issues of cyber-security and cyber-crimes. As Internet penetration continues to gather steam in Nigeria, greater volumes of transactions will be consummated online; and on various electronic formats and platforms”.

“Unfortunately the electronic medium is very attractive to certain class of criminals: those that are dexterous in the use of information technology tools and protocols to perpetrate cybercrimes. This new trend in criminal activity will have an increasing impact on the Nigerian banking environment, especially because for the perpetrators, cyber-crimes can seem relatively low-risk; and if successful, there can be high yields. That is why you must be vigilant. Prevention is better than cure,” he concluded.