Managingng Director/CEO, Fidelity Bank Plc., Nnamdi Okonkwo, has commended the Central Bank of Nigeria (CBN) for its steady intervention towards revamping the nation’s economy following its worst recession.
Speaking in an interview with journalists, Okonkwo said Governor Emefiele failed to bow to the pressure of devaluing the naira but tackled the issue from the retail end of the market by opening up a window where banks were given $2m weekly to enable individuals buy foreign exchange to pay the tuition fees of their children in foreign higher institutions.
He said: “On the monetary side, I want to commend the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, and his team because they were under intense pressure to devalue the naira but they stay focused to address the issue from the retail end of the market by opening up a window where banks were given $2m weekly to enable individuals buy foreign exchange to pay the tuition fees of their children in foreign higher institutions and before you know, it the exchange rate dropped from N520 per dollar to about N370 presently.
“Besides tuition fees, the apex bank also allowed SMEs and operators in the aviation industry to have access to foreign exchange; but perhaps the most significant move by the CBN in stabilising the currency was the introduction of the Investor/Exporter FX window, which has resulted in major inflows by portfolio foreign investors,” he said.
Speaking on the negative effect of the economic recession in general, Okonkwo said: “Recession simply means negative growth in an economy over a specific period of time. I am not in a position to quantify the damage, but I am in a position to know that a lot of things slowed down in line with the slowing economic growth, because the banking industry is a melting pot of what goes on in the economy.
“For instance, if my bank has a customer at Idumota in Lagos who normally lodge in N1m into his account daily and now he is lodging N200,000, it is because the engine of what was responsible for generating those revenues is no longer firing as before.
“Also, if a bank gives out a consumer loan and it is not performing, it is probably because that consumer, that government employee or corporate employee is not getting his salary on time in line with the situation in the economy. The same thing goes for when a bank finances a factory that was expanding its production line to increase output and suddenly that factory realizes that it cannot kick off that line because there is no longer demand for its products because of a general slowdown in demand. So I am not be able to calculate the quantum but in terms of everyday impact on business, it was a thing everybody felt”.