DBN Chief Economist Canvasses Trust In Banking Sector

• Launches book on ‘Banking in Nigeria: Financing during Turbulent Times’

BY COBHAM NSA – The Chief Economist of Development Bank of Nigeria (DBN) Plc, Professor Joseph Nnanna has identified ‘Trust’ as a bedrock for stability in the Nigerian banking ecosystem.

Therefore, he insisted that collectively, trust must be established to achieve meaningful growth and development in the sector.

Prof Nnanna, who spoke at the launch of his book titled “Banking in Nigeria: Financing during Turbulent Times”, said; “This opus highlights very succinctly, the role of Development Finance Institutions (DFIs) play in bridging the funding gap for perceived risky sectors and perhaps other less risky sectors that could find it difficult to access finance during economic uncertainty”.

“The approach adopted by Professor Nnanna for measuring performance to gauge the success of the DFIs, which is a combination of both financial and non-financial indicators, is apt.

The author explained that though being profitable is a prerequisite for financial sustainability, there is an urgent need to zero in on the non-financial performance indicators such as growing micro-businesses to small, and small to medium, and so on.

In the publication, which experts said is a significant contribution to Nigeria’s banking space, the development banker and seasoned Economist, with vast experience in various fields, seriously canvassed job creation and improved human development index of the ecosystem.

He acknowledged that the case studies included in the book were an excellent means of dissecting the operating environment for several industrial sectors to enable readers to appreciate the challenges confronting the Nigerian MSMEs in accessing credit and growing their respective businesses.

Strikingly, one other area that the book stands clear from others, is in the analysis of “TRUST” as a bedrock for stability in the banking ecosystem.

According to the author; “Collectively, trust needs to be established to achieve meaningful growth”, even as he also noted that; “Setting a framework at the macro level remains crucial for the banking system to continuously move forward”.

In his remarks, the Book reviewer, Dr Kanu Ohuche commended Prof Nananna’s efforts at putting together his thoughts on paper for posterity.

Taking the audience down memory lane, Dr Ohuche articulated that “banking in Nigeria is 127 years old this year, having debuted with Barclays bank, now the First Bank of Nigeria, in 1894. Therefore, it is safe to say that banking in Nigeria has come of age.

“Indeed, at 127 years, banking in Nigeria would have been a mature adult, if not a great, great grandpa in terms of chronological age and wisdom.

“However, whether this maturity can be deduced from its behavior in the context of its role in the Nigerian economy or its leadership of the financial services sector, remains conjectural, or even controversial in my opinion.

“In my culture, the Igbo culture, when an adult’s behavior does not reflect his or her age, such an adult is often treated with contempt, and disrespected by his or her peers”.

According to him; “Notwithstanding, I sincerely believe that this very commendable effort by Prof Joseph Nnanna in penning this book is one of the ways to make the Nigerian banking system behave its age. That said, it is also inconceivable that the Nigerian economy would have been what it is today without the immense contributions of the Nigerian banking sector.

“There is no gainsaying that in market-driven or even command-driven economies, the bank plays a pivotal role in supporting economic growth and development through its intermediatory contributions; more or less”.

For Dr Ohuche; “Readers will find the book very useful in analyzing the successes and challenges of the various interventions offered by the Central Bank of Nigeria, both in bridging the funding gap and subsidizing credit to the critical sectors of the Nigerian economy. Several intervention programs have been proposed and implemented by the CBN to positively impact the real economy with arguably mixed results”.

He concluded that; “The book should not be missed by regulators, supervisors, operators, customers, analysts, etc”, adding; “The exploratory approach to key financing issues adopted in the book offers a reader new thinking on how to approach financing problems and feasible solutions particularly during the period of economic turbulence”.