[Nigeria Business Week] Andrea Ayemoba: FG targets unidentified sim cards, CBN targets non-compliant banks
Events this week have taken an interesting turn – investors have in the last few days demonstrated a lack of confidence in the banking sector, otherwise known for its resilience in the face of economic instability. Investors’ lack disinclination to invest in financial services stock caused slight retreat in the Nigerian overall stocks on the market, and banks specifically took the worst hit. Notwhitstanding, the financial sector remains a stable one, with figures released by the Central Bank showing an increase in microfinance banks’ assets and Coronation Merchant bank recording a 61% growth in gross earnings. To stabilize the imbalance in the finance sector, the CBN has extended interest rate forbearance for certain borrowers, at the same time warning the public against dealing with unlicensed and illegal financial operators that promise outrageous returns.
Several major commercial banks in the country have been slapped with hefty fines for not complying with the CBN’s regulations in financial transactions regarding cryptocurrencies. The switch to digital currencies appears to be an inevitable one that’s bound to happen in the near future, according to a PWC report indicating that the vast Central Banks of the world are considering this very initiative.
The agriculture industry did not shine much this week, nor did the insurance sector. The former showed a lag in local productivity and the latter emerged the worst performing sector in Q1 of 2022. The President did however express optimism in Nigeria’s fertilizer producing capabilities, the results of which are to soon be evident.
In a move that has been a long way coming, the Federal Government through telco companies this week barred all Nigerians whose phone numbers are not linked to the National Identification Number from making calls. With the ensuing chaos that can be expected, deactivated subscribers are seeking a brief extension to comply with what is now known as the SIM-NIN requirement.
The trade industry is facing its challenges, annual import bills running into billions of dollars. Truckers have also noticed a substantial drop in cargoes coming into the country, sparking even more fears of looming unemployment. Diesel experts have projected what Nigeria’s inflation will look like in the second quarter of the year, a trend made worse by Russia’s conflict with Ukraine. Indeed, Nigeria’s total debt is heading further north by the day and the production and export of oil that was once a solid economic pillar is far less so today. A variety of experts have proposed diversification of the country’s export portfolio as a way out of this economic predicament. And it’s hard to argue with that solution.