Central Bank of Nigeria, Governor, Mallam Lamido Sanusi, has said that the establishment of the Sovereign Wealth Fund (SWF), was part of the financial sector reforms in the financial sector to prosper and shield the economy from adverse global shocks. Sanusi, who spoke yesterday in Lagos at the Euromoney Conference, said that the fund would cushion the economy in the event of global oil price crash.
The governor, who was represented at the event by Deputy Governor, Financial System Stability, CBN, Dr. Kingsley Moghalu, said the Sovereign Wealth Fund and the excess crude account are a buffer that will stabilise the economy in case of future problem.
“The Sovereign Wealth Fund was created to redistribute oil wealth for the benefit of the present and future generations. “It will also help in providing critical social infrastructure to stimulate private sector investments for economic growth,” he said.
Sanusi said that due to the various reforms, the nation’s external reserves had increased from $44.2 billion in December 2012 to $46.9 billion in August 2013.
He said the CBN’s decision to increase cash reserve requirement (CRR) on public sector deposits to 50 per cent up from 12 per cent have started yielding positive fruits as banks have become more creative in rending quality service and making money.
He said that the CBN took the action on CRR as a result of what it observed, a situation where bank had so much relied on government funds to run the banks. “We had to take that decision to save the banking sector”.
The governor said that the far-reaching transformation in the banking sector was to bring out the best in the banks operating in the country, so that they can offer robust services to their customers. He charged banks on the need to speedily move towards diversification as a way to ensure a better, more effective service.
He said even though all environments are not the same, “but Nigerian banks have learnt a lot from banks in developed climes and that is the reason they are playing an important role in the continent’s economic trajectory”. He advised banks to invest in agriculture. “We have encouraged banks to open desk for agric.
We want to show them that they can make money by supporting agric businesses. We would not force banks to lend”, he said. He said that a total of N199.25bn out of the N200bn Commercial Agriculture Credit Scheme had been disbursed to finance 270 projects in 30 statesSWF’ll shield Nigerian economy from shocks –CBN by ngcareers