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BREAKING: Nigeria’s Central Bank Establishes International Financial Centre 

Central Bank of Nigeria's logo is seen on the headquarters building in Abuja, Nigeria January 22, 2018. REUTERS/Afolabi Sotunde - RC1D90C799D0

September 14, (THEWILL) – The Central Bank of Nigeria (CBN) has disclosed  plans to establish the Nigerian International Financial Centre (NIFC).

CBN Governor, Godwin Emefiele who made this known on Tuesday, said the NIFC will act as an international gateway for capital and investments, driven by technology and payment system infrastructure.

Emefiele spoke on Tuesday at the 14th Annual Banking & Finance Conference, being organized by the Chartered Institute of Bankers of Nigeria (CIBN).

Speaking on the theme of  the Conference “Recovery, Inclusion and Transformation: The role of Banking and Finance”, the CBN governor in his keynote address explained that the new financial hub will curate local and international banks to make them global champions.

“The NIFC will be a 24/7 Financial centre that will complement London, New York and Singapore financial centers and enable an acceleration of our home grown initiatives such as the Infracorp plc, the N15 Trillion infrastructure fund which we will be launching in October 2021”, he said

The NIFC, according  to Emefiele, will also complement ongoing initiatives on the Nigerian Commodity exchange and the National Theatre creative hubs Nigerian youths as well as the E-naira project which will also debut in October 2021.

“The NIFC will take advantage of our existing laws such as the BOFIA 2020, NEPZA and other CBN regulations  to create a fully global investment and financial hub where monies, ideas, and technology will move freely without hindrance”, he added.

On efforts of the CBN in creating a robust payment system through the digital currency, Emefiele said,  “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 2020, close to $500m worth of funds have been invested in firms run by Nigerian founders.

“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 businesses.

“It is in this vein that the Central Bank of Nigeria is working to deploy a central bank digital currency, which would help in attaining our goals of fostering greater inclusion using digital channels, supporting cross border payments for businesses and firms as well as providing a reliable channel for remittances inflows into the country.

“When fully deployed, the eNaira will ensure that Nigerians in remote areas can conduct financial activities using their digital as well as feature phone devices.

“The support of the financial industry will be critical in the deployment of the e-naira and efforts are ongoing to encourage continued partnership between the CBN and stakeholders in the financial industry.”

Emefiele also noted the declining revenue in meeting the task of infrastructural development. According to him, the sharp drop in crude oil prices has created huge gaps in generating revenue to meet targeted infrastructural development.

The CBN governor said, alternative ways of funding  critical infrastructural needs have been evolved through  InfraCorp, to sustain the growth of the Nigerian economy.

“We are all aware of the criticality of infrastructure in fostering economic growth. Yet, Nigeria still has a huge gap to fill in this regard. That is why we believe the banking sector must pay attention to providing long-term finance for infrastructure development in the country.

“With the decline in revenues due to the federal and state government because of the drop in crude oil prices, alternative ways of funding infrastructure are critical if we are to generate sustained growth of our economy.

“In this regard, I am pleased to announce that InfraCorp, the infrastructure company being created by the CBN, African Finance Corporation and the Nigerian Sovereign Investment Authority to raise N15 Trn will be unveiled in October, 2021.

“InfraCorp would enable the use of mostly private capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.

“The purpose of the N15 Trn being raised is to address some of our infrastructure needs, while providing reasonable returns to investors. We believe this well-structured fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.”

He urged the  banking and financial system  to support growth in sectors with significant growth potential, in order to enhance the resilience of the Nigerian economy, in the face of external shocks.

He also  canvassed strong financial support for Agricultural development.

“Another key area of focus that would help support stronger growth of our economy is the agriculture sector.

“We have witnessed the disruptions COVID-19 has had on global supply chains and food supply. These disruptions led to a significant surge in freight charges and a corresponding increase in global inflation.

“It is important that we continue to support measures that will increase productivity of our agricultural sector and strengthen our resilience against externally induced shocks. The banking sector therefore has a significant role to play as a facilitator of growth through its intermediation function”, he said.

On efforts on economy, he said, “I am optimistic that by the end of the year, our economy will not only close the output gap brought about by the 2020 recession, but that we would end the year with an annual GDP growth of between 2.5 – 3.0 percent, up from -1.92 percent in 2020.

“Notwithstanding the positive news of your excellency, I would admit that growth remains fragile. We are not out of the woods yet given the challenges in combating the covid-19 pandemic; and would therefore urge all stakeholders to remain vigilant to prevent a resurgence of the virus. The implementation of our various interventions need to be intensified to sustain the recovery and stimulate further growth of our economy.”