President Muhammadu Buhari yesterday assented to the Banks and Other Financial Institutions Act 2020. The new law repeals the extant Banks and Other Financial Institutions Act 1991 (as amended) and establishes a Credit Tribunal which will now handle cases pertaining to loan recovery. The Act also addresses the incidence of high non-performing loans within the financial system, which has been a key deterrent to lending by financial institutions.
According to a statement by presidential spokesman, Garba Shehu, the monumental piece of legislation is expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy. Shehu said,
“The BOFI Act 2020 updates the enabling law in response to developments and significant evolution in the financial sector over the last two decades. “It will increase the appetite of banks and other financial institutions to channel much needed credit to the real sector to support economic recovery and promote sustainable growth. “In this respect, it introduces a credit tribunal to improve loan recovery and address the incidence of high non-performing loans within the financial system, which has been a key deterrent to lending by financial institutions.
“Furthermore, it strengthens the regulatory and supervisory framework for the financial industry and provides additional tools for managing failing institutions and systemic distress to preserve financial stability amongst others”. Shehu further explained that the Central Bank of Nigeria will hold structured engagements with stakeholders across various sectors of the economy on critical aspects of the Act in the coming months. “This enactment of the BOFI Act 2020 is a historic and significant achievement, which is indicative of effective and productive collaboration between the Executive and Legislature arms of Government,” he noted.
FG To Access $750m World Bank Loan For States Meanwhile, as part of windows of opportunity to mitigate the effect of Covid-19, the federal government is in the process of accessing a World Bank loan of $750 million on behalf of the states of the federation. The federal government said the facility is to stimulate the local economy and support vulnerable household’s consumption. Making reference to the windows of intervention in her address at the inauguration ceremony of the Federal Steering Committees of the Nigeria COVID-19 Action Recovery and Economic Stimulus (N- CARES) in Abuja, minister of finance, budget and national planning, Mrs. Zainab Ahmed said the federal government has created several windows of interventions as captured in the Economic Sustainability Plan (ESP) inaugurated by president, Muhammad Buhari on March 30, 2020.
The ESP is, according to her, to among other things respond robustly and appropriately to the challenges posed by the COVID-19 pandemic, identify fiscal measures to enhance oil and non-oil government revenues and reduce non-essential spending. Speaking on the need for proper implementation of the initiative, Ahmed said: “To ensure that implementation of the N-CARES is in line with the federal government priorities as outlined in the ESP, the Federal Steering Committee, made up of ministers and permanent secretaries as well as a Technical Committee, made up of directors of key ministries, department and agencies (MDAs) has to be in place.
The government has carefully selected you as members of the Federal Steering and Technical Committees because of the important role your MDAs play in the recovery of the Nigerian economy as well as the fulfillment of lifting 100 million people out of poverty.” On the expediency of the inauguration of the committee, the Honourable Minister said, “the inauguration of your committee is expedient given the nature of this emergency intervention; Nigeria as the biggest economy in Africa cannot afford to remain in recession; the survival of over 200 million population is germane to all we do and we must address the concerns of the majority of our populace.”
BY JONATHAN NDA- ISAIAH And MARK ITSIBOR,