. InfraCo to commence operation in 2 months
. Financial Centre to be located at Eko Atlantic
The Central Bank of Nigeria (CBN) has revealed that the CBN Digital currency app, the eNaira app, has witnessed almost 600,000 downloads since its launch in October.
This is even as the total financial transaction using digital channels rose by over 153% between 2018 and 2020, as volumes rose from 1.3 billion to over 3.3 billion in 2020.
Also, the long-awaited N15trillion-worth Infrastructure Company (InfraCo) Limited, originally scheduled to commence full operations in the third quarter, will now begin in two months’ time.
The CBN Governor, Godwin Emefiele, disclosed these at the 56th Chartered Institute of Bankers of Nigeria (CIBN) Annual Bankers Dinner, on Friday, in Lagos.
On the eNaira, Emefiele said: “In less than four weeks since its launch, almost 600,000 downloads of the eNaira application have taken place. Efforts are ongoing to encourage faster adoption of the eNaira by Nigerians who do not have smartphones.
“The support of the financial industry will be critical in the ongoing deployment of the eNaira and efforts are ongoing to encourage continued partnership between the CBN and stakeholders in the financial industry.”
Recall that the eNaira was launched on October 25th with the hope of increasing Nigeria’s gross domestic product (GDP) by $29 billion over the next 10 years.
Emefiele reiterated that building a robust payment system that would provide cheap, efficient, and faster means of conducting payments for most Nigerians, has always been the focus of the apex bank.
He said: “The growing pace of digitization globally, makes it essential that we leverage digital channels in fulfilling this objective.”
According to him, digital payment channels also helped to support the continued conduct of business activities during the lockdown.
Emefiele noted that the banking sector’s robust payment system has continued to evolve towards meeting the needs of households and businesses in Nigeria, with about $900 million invested between 2015 and 2021 in firms founded and run by Nigerians, showing the level of confidence in the nation’s payment system.
He continued: “Notwithstanding these gains, close to 36% 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 households and businesses.’’
Recall that on October 25, 2021, President Muhammadu Buhari, formally launched Nigeria’s digital currency,
The eNaira’s new payment system, which took four years to crystallise, will drive financial inclusion, serve as a backbone for electronic payment in Nigeria, increase remittance, improve cross border trade and also enable the movement of more people from the informal to the formal sector, hence scaling up the tax base of the country.
The support of the financial industry will be critical in the ongoing deployment of the eNaira and efforts are ongoing to encourage continued partnership between the CBN and stakeholders in the financial industry.
InfraCo operations
Emefiele said the InfraCo would now commence in two months, adding that the strategic projects it would fund would speedily foster economic activities and inclusive growth.
He said: “With the decline in revenues due to the federal and state governments as a result of reduced receipts from the sale of crude oil, alternative ways of funding infrastructure are critical if we are to ensure sustained growth of our economy.
“As we are all aware, the cost of logistics is often seen as a significant impediment to the growth of businesses in the country.
“In recognition of the role improved infrastructure could play in the development of our economy, along with the need to leverage private sector capital in funding the over N35 trillion deficit, which is the estimated amount required to build an efficient infrastructure ecosystem in Nigeria, the Central Bank of Nigeria (CBN), working in partnership with critical stakeholders such as the Nigerian Sovereign Investment Authority (NSIA), and African Finance Corporation (AFC), set up Infracorp.
“Infracorp is expected to raise over N15 trillion to support investment in critical infrastructure in Nigeria.
“So far, N1 trillion has been provided as seed fund by the promoters to support the operations of Infracorp. We recently appointed four fund managers, and a Management Team has been selected to run and manage Infracorp.
“Over the next two months, Infracorp will kick off its operations by targeting strategic infrastructure projects that would help catalyse further growth of our economy. Infracorp is expected to set the standard template that will help in enabling greater private sector funding for public infrastructure projects in Nigeria.”
With the decline in revenues due to the federal and state governments as a result of reduced receipts from the sale of crude oil, alternative ways of funding infrastructure are critical if we are to ensure sustained growth of our economy.
Financial centre
Meanwhile, the apex bank said it plans to set up the earlier announced, International Financial Centre, at the Eko Atlantic City by the second quarter of 2022, for investors seeking to invest in critical sectors of the economy.
Emefiele said the Centre, which would serve as a gateway for funds and investments into Nigeria, will be driven by technology and payment system infrastructure.
He noted that a major challenge to supporting growth in key sectors of the Nigerian economy is access to large pools of cheap investment capital.
He continued: “Today, over $100 trillion is held by institutional investors in the Organisation for Economic Co-operation and Development (OECD) countries, most of it invested in low-yielding assets relative to high-yielding opportunities in Nigeria.
“Working to tap into this pool of funds will require the set-up of an investment framework that offers comfort and security to investors seeking to invest in critical sectors of our economy.
“In this regard, the Central Bank of Nigeria is working to set up an International Financial Centre at the Eko Atlantic City in Lagos that will serve as a hub for attracting domestic and external capital which is needed to strengthen our post-COVID economy.
“The International Finance Centre, when fully operational in the 2nd quarter of 2022, will help to position Nigeria as a key destination for investment in Africa.”
Leveraging the strength of the private sector will be critical in mobilising funds that are needed toward building a more resilient and stronger economy.
Looking ahead
For Year 2022, Emefiele noted that notwithstanding current positive indicators, “our economic growth remains fragile, as our unemployment and inflation rate remain at levels that are not very supportive of growth.
“Second, continued implementation of our intervention efforts would need to be undertaken to sustain the recovery efforts and stimulate further growth of the economy.
“Third, given population growth at about 2.7 per cent annually, it is important that we continue to deploy measures that will enable our economy to attain annual growth rates of over five per cent.”
“Through the pandemic, we are aware that our policy responses are often more effective when we work with the private sector. For example, the CACOVID alliance played an instrumental role in reducing the negative effects of the pandemic, by providing palliative support to families affected by the virus and in rebuilding our healthcare institutions.
“Leveraging the strength of the private sector will be critical in mobilising funds that are needed toward building a more resilient and stronger economy. We intend to strengthen collaborations with the private sector in order to support investments in critical sectors such as infrastructure, and ICT, in addition to ongoing efforts to build a stronger agriculture and manufacturing base in Nigeria.”
“As a result, all efforts in 2022 must be made to ensure that we maintain our focus on improving access to finance and credit for households and businesses, mobilising investment to boost domestic productivity, enabling faster growth of non-oil exports, and supporting employment generating activities,” he added.
