COMFORT EKELEME, Asst. Business Editor
Over the last ten years, the nation’s Financial System Strategy (FSS2020) has witnessed a number of significant changes which has led to positive transformation in key sectors of the economy.
The Financial System Strategy (FSS) 2020 is an initiative of the Federal Government aimed at developing a coherent blueprint to develop Nigeria’s financial system to help achieve its vision to be one of the top 20 largest economies in the world by the year 2020 and a major international financial centre. It is also a fully synchronized and integrated with the ongoing V20-2020 economic reforms and the Seven-Point Agenda of the Federal Government of Nigeria.
However, the success story of FSS2020 will not be complete without the effective roles played by the Deputy Governor, Corporate Services and Coordinator, Financial System Strategy (FSS) 2020, Alhaji Suleiman Barau who had maintained that the Securities and Exchange Commission (SEC) has been successful in the implementation of the E-dividend policy which has always been one of the initiatives FSS2020 had been advocating, a development which was made possible through commitment and hard work.
Giving the milestones so far achieved, Barau said “We have to look at them from the existing sectors perspectives. For Mortgage Sector, a robust secondary mortgage has been created with the CBN and the Mortgage operators clearly streamlined which has led to the establishment of the Nigeria Mortgage Refinancing Company (NMRC). “Again, the Uniform Underwriting Standard which was nonexistent has now been codified and introduced in the Mortgage industry to regulate their practice. In addition, the framework for the Mortgage Asset Registry has been developed to capture Mortgage transactions on a common IT platform”.
Alhaji Barau had built on the achieved successes while assuring improvement in the areas of Payment System Vision 2020 which was an initiative of the FSS2020 along with the Cashless Policy. Meanwhile, experts in the financial services sector recently expressed satisfaction with the tremendous achievements recorded through the initiative , especially during the tenure of Barau as the Deputy Governor, Corporate Services and Coordinator, Financial System Strategy (FSS) 2020.
The successes recorded through the initiative cuts across the financial services sectors and other sectors of the economy, with a good number of them recording positive growths so far, a development that has placed the nation’s financial services sector at par with the international community.Barau was of the view that by the year 2020, Nigeria should have a Pension Industry with over 20 million contributors delivering measurable impact on the economy and the funds will multiply extensively without being invested to develop or support poor infrastructure need of Nigeria.
He added that the Pension Transformational Programs of FSS2020 are to align stakeholders to accelerate contributions to pension funds and enabling infrastructure investment in Pension funds. The National Pension Commission, PENCOM as the regulator of this industry has spelt out conditions upon which such investment with pension fund can be predicated.The CBN has also introduced the categorization of Primary Mortgage Banks into national, state and local, while the Pension asset has grown from about N3trillion in 2013 to N6.02 trillion in 2017. According to him, the Nigerian Sovereign Investment Authority (NSIA) has been appointed advisers to manage the deployment of Pension funds into long term infrastructure deployment, adding that through sensitization and mass advocacy, PENCOM has stepped up prompt settlement of pension claims for retirees and is embarking on massive technical trainings using the IT platform to ensure prompt service delivery and implementation of the Micro pension scheme. “For insurance sector, the micro insurance (Takaful) and compulsory insurance schemes are being implemented. Also, improvement in the settlement of insurance claims of policy holders is being pursued as confidence and trust of the holders which was at lowest ebb has now being restored.
“There is also capacity building of insurance and inclusion of insurance in the school curriculum for prompt service delivery. For MSME sector several interventions to improve funding and access to finance for small businesses. Also creation of the National Collateral Registry for lending’s and access to finance by SMEs is a huge milestone, especially with the passage of the Secured lending using movable assets Bill by the NASS,”he stated. According to him, notwithstanding this milestone, there are some challenges militating against the achievements of FSS2020 objectives, which he said include funding and logistics, technical challenges, human capital development, especially the inability to attract talents from abroad to Nigeria, delays in the passage of the identified financial sector bills by the National Assembly, policy inconsistency and lack of continuity.
On the kind of benefits and incentives available for the listing of foreign companies in the Nigeria International Financial Center, Barau listed competitive corporate and tax rates, competitive Value Added Tax (VAT) on product and serves, currency convertibility, flexible expatriate quota limit, one stop shop approach to business registrations and other permits, 100 per cent repatriation of funds, access to Nigeria double taxation treaties, 100 per cent foreign ownership permitted, low cost quality information services and internationally accepted investment regulations.On how stakeholders efforts have impacted on the financial systems value chain, he said “since actual implementations are being done by these agencies, our attempt is to identify where there are challenges or issues or duplication of efforts, FSS2020 call the attention of the affected institution to address it in the overall interest of the financial system. The FSS2020 initiatives were carefully tailored to align with the mandate of these institutions that have the responsibility to implement the identified initiatives which is within the realm of the FSS2020 objectives.
Speaking on what the government can do to make the implementation of the initiatives successful, he said there is need to initiate policies that would ease the doing of business in Nigeria and encourage investment within the country; ensure that there is enabling infrastructure and guarantee maximum peace and security in the country. In his presentation titled, ‘The Imperative of Treasury Single Account in the face of dwindling Government Revenue’, Barau had noted that the idea of Treasury Single Account (TSA) was conceived when some agencies refused to declare and remit the 25per cent of their annual revenue to the treasury as demanded by law.
According to him, the implementation has resulted in huge cash being moved from the Deposit Money Banks (DMBs) to the CBN vaults for government. It is believed that some 14per cent of the Cash Reserve Requirement (CRR) was freed from the banks for further investments into the economy, adding that the government embarked on this reform, among other institutional reforms in the various sectors of the economy, to entrench the system and raise its revenue profile for economic development.
The implementation of the TSA policy, affirmed resulted in the elongation of the tenure of state government loans, loans to the oil and gas sectors, aggravate liquidity conditions in banks and impair their financial intermediation role, thus affecting economic growth. Consequently, CBN advised on the urgent imperatives of banks to aggressively support the efforts of government at job creation by channeling available liquidity into target growth-enhancing sectors of the economy such as agriculture and manufacturing with a view to properly direct lending and promote employment generation.Through the FSS 2020, the CBN has achieved a lot in the areas of Payment System Vision 2020 which was an initiative of the FSS2020 along with the Cashless policy. The FSS2020 is just a platform that brings together all the key implementing institutions to achieve a common objective in the financial system.
Also, the funding of FSS2020 Programme had been solely borne by the CBN, until recently when some of the implementing institutions like PENCOM started making contribution to its funding activities with others showing interest to do same. Most of the implementing institutions have been providing technical assistance to the running of the programme in the areas they are more specialized.Barau had noted that in Kaduna state for instance, from the initial efforts of government, more than N24billion undeclared funds of the state was said to have been realized from over 200 bank accounts. In Niger State, he said the TSA was adopted to eliminate corruption, block leakages and improve the revenue base of the state. “It was said that over 400 accounts were operated by the ministries and other agencies of government. This had made monitoring and control cumbersome. In Kwara State, the policy has been adopted and government was determined to block leakages and eliminate diversion of funds”.
Also frameworks that ensure compliance to set rules and creditors’ rights were adequately addressed. He believes that developing the corporate bond market remains essential as it would diversify the sources of debt, assist liquidity management and contribute to financial stability. Notably, it will reduce, substantially, the recourse to the money market for long term funds/debt capital.
Importantly, resuscitation and development of the corporate bond market, he said was in line with the FSS2020 strategic objective and one of the actionable decisions continually emphasized by the CBN.
FSS2020 Mortgage Finance Objectives
To establish a safe and profitable mortgage market by setting up appropriate infrastructure/institutions/processes, to introduce a new framework to strengthen property/security rights, use existing mortgage market mechanisms to make affordable long term finance available to all classes of Nigerians to own their homes and build wealth, enhance use of market mechanisms to improve housing delivery system.
FSS2020 had witnessed a number of changes in its headship. The first person to head the Secretariat as a Technical Adviser was an Italian, Mr. Luigi Passamonti who was seconded from the World Bank. He held sway from February 2010 to October 2010. Then come Ugochukwu Okoroafor, then a Deputy Director who held the position from October 2010 to April 2012 when he was elevated as Director of Corporate Communications. The third in the hierarchy was Engr. Oluwatoyin Jokosenumi, a Deputy Director in the Strategy Management Department who held office from April 12, 2012 till November 12, 2015 when M.D. Suleyman came on board as the first substantive Director for the FSS2020 Secretariat.
FSS2020 gets maiden director
A substantive Director has been appointed by the CBN for the Secretariat of the Financial System Strategy, FSS2020. He is Mr. Mohammed Dabai Suleyman, who until his recent appointment was a Deputy Director in the Legal Services Department of Central Bank of Nigeria (CBN).An amiable gentleman, Mr. Suleyman who hails from Zuru in Kebbi State is an alumnus of Ahmadu Bello University, Zaria where he read Law and obtained an LLB degree. He also attended the Nigerian Law School in Lagos.
Before his appointment as Director, FSS2020 Mr. Suleyman was the Head, Administrative and Contemporary Law Division, Legal Services Department at the CBN between October 2014 and November 2015. He also had a stint with the Nigeria Sovereign Investment Authority (NSIA) as General Counsel from December 2013 to October 2014 on secondment from the CBN.The new Director who has since assumed duty in the FSS2020 Secretariat has many skills in the areas of Strategic Planning, Risk Management, Banking, Business Process Improvement, Negotiation, Management, Commercial Litigation, Financial Risk, Legal Writing, Corporate Law, Financial Analysis, Legal Research, etc.
In his maiden address to the staff of the Secretariat on November 12, 2015 during a Handover ceremony, Mr. Suleyman invited all staff to work together as members of one family to achieve good result. He promised that all issues pertaining to staff would be amicably resolved as a family and promised to contribute his own quota towards uplifting the status of the Secretariat in impacting on the national economy. He promised to restructure and redefine FSS2020 such that we align our reforms to be in tandem with the government of the day.
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