It is now less than two years to the deadline for achieving the Financial System Strategy (FSS 2020) and the bill is yet to be passed into law. Passage of the bill will ratify much of the work that have been done and accord it legal backing. It would also provide platform for further engagements even after the expiration of the deadline.
Nigeria has, after 10 years of establishing the FSS2020, achieved 50 percent out of the 80 percent target of the financial inclusion. FSS 2020 was born out of a prediction by Goldman Sach that Nigeria’s economy would be among the top 20 economies of the world by 2020.
Goldman Sachs believes that only two countries in Africa will overtake Italy in GDP size by 2015 and that is Nigeria and Egypt. In his presentation on Nigeria’s Financial System Strategy 2020 Plan “Our Dream”, Chukwuma Soludo, former governor of CBN, on June 18, 2007, said, for Nigeria to achieve this feat and its aim of being part of the 20 largest economies by 2020, she must maintain an annual average growth rate of 12.4 percent over the next 15 years.
Nigeria’s GDP grew by 1.92 per cent year on year in fourth quarter of 2017 compared to 1.4 per cent in third quarter of 2017, according to the National Bureau of Statistics (NBS).
In 2007, the CBN launched the FSS2020 aimed at calibrating the financial system as a means of ensuring economic growth and development with the view of growing the Nigerian economy to become one of the 20 largest economies in the world by 2020.
FSS 200 aims to develop and transform Nigeria’s financial sector into a growth catalyst and engineer Nigeria’s evolution into an international financial centre. The strategy was designed to strengthen and deepen the domestic markets, enhance integration with the external financial markets; and promote sustainable economic development.
Passing the FSS 2000 bill is important for Nigeria as it is focused on making Nigeria a financial hub of Africa just like London is the financial hub of Europe.
Non-passage of the bill impacts negatively on the Federal Government’s target of achieving 80 percent financial inclusion by 2020. A survey on access to financial service by Enhancing Financial Innovation and Access, revealed that Nigeria was still at 41.6 per cent exclusion rate as at 2016, three years to the 2020 target.
Interestingly, the Nigerian Senate on May 15, 2018 passed the Companies and Allied Matters Act (CAMA), is seen as the biggest business reform bill in Nigeria in over 28 years.
Some other bills passed by the Senate the passage of the collateral securities into law, passage of 15 other major economic Bills passed to law, rand review of about 50 existing extant laws.
Segun Ajibola, President/Chairman of Council, Chartered Institute of Bankers of Nigeria (CBN), who is presently pushing for the passage of FSS 2020 bill acknowledged that these bills passed into law by the 8th Senate have in no small measure enhanced the recovery and resilience of Nigeria’s economy.
However, there are other related bills that are critical to the implementation of FSS 2020. These include the Nigeria International Financial Centre Bill, Financial Consumer Protection Bill, and the Electronic Transactions Bill.
The FSS 2020 bill as noted by Seye Awojobi, Registrar/CEO, CIBN, was passed by the 7th Senate but assent was not granted by President Muhammadu Buhari.
Recognising the importance of the FSS2020 Bills, Bukola Saraki, Senate president said FSS2020 must be brought to the front burner in view of its strategic work that is important to the financial system and economic growth of Nigeria.
The Senate President also indicated that in respect of the pending Bills there will be need to set up a small joint technical committee that will prioritize the Bills for quick passage. “The Chairman of the Committee on Banking will be on hand to facilitate a working collaboration on the critical Bills with the delegation, particularly FSS2020 High Level Legal Working Group and the FSS2020 Secretariat,” Saraki said.
The stakeholders involved in the implementation of the FSS 2020 include the Federal Ministry of Finance, National Assembly; Securities and Exchange Commission (SEC); Nigerian Deposit Insurance Corporation (NDIC); National Insurance Commission (NAICOM); National Pension Commission (PENCOM); Federal Inland Revenue Service (FIRS); Nigeria Insurers Association (NIA); Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Manufacturers Association of Nigeria (MAN).
Others are Debt Management Office (DMO); Nigerian Stock Exchange (NSE); Deposit Money Banks (DMBs); Federal Mortgage Bank of Nigeria (FMBN); Bank of Industry (BOI); Nigeria Export Import Bank (NEXIM); Bank of Agriculture (BOA) and Development Partners, while the key implementing institutions are CBN, NDIC, SEC, NAICOM, PENCOM, DMO, NSE, Federal Mortgage Bank of Nigeria (FMBN), FIRS, the Small and Medium Enterprises Development Agency of Nigeria and Financial Reporting Council.