Tuesday, 6 August 2013

Transforming Nigeria into an international financial centre

One of the fundamental objectives of the Financial System Strategy 2020 is to make Nigeria Africa’s financial hub by transforming the country into an international financial centre. The FSS 2020 which is a strategic plan by the Central Bank of Nigeria (CBN) is expected to synchronise and integrate with the ongoing economic reforms and harness the gains to ensure that Nigeria becomes Africa’s financial hub and joins the league of top 20 world largest economies by 2020.
An international financial centre is a place where financial institutions from many different jurisdictions come together to carry out financial intermediation of an international dimension. The goal of CBN is geared towards developing a more resilient, competitive and dynamic financial system with best practices. It should be one that supports and contributes positively to the growth of the economy through the economic cycle, and has a core of strong and forward looking domestic financial institutions that are more technology driven and ready to face the challenges of liberalisation and globalisation.
It is against this background that the CBN rightly gave attention to the need, and preconditions for building an international financial centre in the country at the recent international conference which commemorated its 50th anniversary. Experts at the conference were emphatic: the CBN should preoccupy itself now with the goal of positioning Nigeria as the safest and fastest growing financial system among emerging markets.
Furthermore, for Nigeria to be transformed into an international financial centre, necessary efforts should be made towards improving the quality of immigration, tertiary education, information technology, infrastructural facilities and global linkages. The government should, as a matter of urgency, begin to work towards formulating specific policies to promote the efficient functioning of the financial system in the manner as formulating policies concerning financial infrastructure aimed at mitigating risks, increase efficiency and enhance market transparency and liquidity, thus supporting the safety and soundness of the financial system.

The following conditions are equally necessary: a strong commitment by federal and state governments to promoting international financial centre; a multilingual professional financial services workforce that can flexibly respond to changing business conditions and independently add value to services; low cost and efficient communication and information system; political and economic stability; well established international stock exchange, a commitment to business tax reform, with an internationally responsive corporate tax rate and capital gains tax initiatives; a strong, stable and transparent legal and regulatory system.
There is also the need for policies concerning financial intermediation for the promotion of stability, integrity, diversity and efficiency of the financial system. Creating a regulatory framework that promotes the stability of the financial system, provides an appropriate measure of protection to users of financial services and facilitates competition, which is consistent with the standards and practices of major international financial centres is imperative.
Government should, through the CBN, seek to enhance policies that will pave way for an efficient Nigerian financial sector to metamorphose into a host that is capable of supporting a dynamic international financial centre.
Source: BusinessDay

No comments:

Post a Comment