Yar'Adua lauds CBN at 50 over economic reforms
From Mathias Okwe, Abuja
PRESIDENT Umaru Musa Yar'Adua yesterday placed the Central Bank of Nigeria (CBN) on the performance scale and concluded that it had fared well since its inception 50 years ago.
Yar'Adua, who singled out the bank's reforms in the last five years for mention, said its consolidation exercise in the banking sector had helped to shield the country from the impact of the current global crunch.
The President's vote of confidence on the CBN is however being seen as an apparent kudos for the apex bank's Governor, Prof. Chukwuma Soludo, who implemented the recapitalisation exercise.
Opening a forum to mark CBN 50th anniversary in Abuja, Yar'Adua, who was represented by the Finance Minister, Dr. Mansur Mukhtar, said in spite of the constraints and challenges of political, economic and social environment, the bank performed creditably well in delivering on its core mandate.
The theme of the anniversary: "Central banking - financial system stability and growth," reflects on its journey so far and the challenges ahead.
The President said: "As you evaluate the past, I believe that one conclusion any unbiased observer of the CBN over the last 50 years will reach is that despite the constraints and challenges of the political, economic and social environment of Nigeria, the CBN has performed creditably well in delivering on its core mandate.
"These reforms have been very visible in the last five years. Most people would agree that without the successful banking consolidation and effective management of our foreign reserves, the current global crisis would have shaken the financial system and our national economy to their foundations with calamitous consequences.
"As we work to re-brand Nigeria, our banks remain the country's dominant transnational corporations whose brand names adorn billboards around the world.
"The CBN microfinance banking revolution is also changing the face of the poor in our country, and the advances in the payments system are commendable. I cannot possibly list all your achievements in this short speech. I can only say, keep it up," Yar'Adua said.
The President restated his administration's resolve to lay a solid foundation for Nigeria's socio-economic transformation through its seven-point agenda.
Soludo used the occasion to comment on the state of the nation's financial institutions in the wake of the market meltdown.
He said the banks' total exposure to the capital market as at the January 2009 was N784 billion, representing about 10 per cent of total loans to investors.
The CBN chief added that between N350 billion to N400 billion could be classified as toxic assets, approximating only between four to five per cent of the affected banks' exposure as at last February.
Soludo said going by the international capital assets management quality, earnings, liquidity, sensitivity to market risk (CAMELS) showed that Nigerian banks were doing well, scoring an impressive 62 per cent, which he adjudged as satisfactory.
He said the asset base of the nation's 24 banks grew by 439.4 per cent between 2003 and 2009, adding that the ratio of non-performing loans to total loans dropped from 22 per cent in 2003 to six per cent last year.
