FSS 2020 project: Trudging to destination 12 years after
Consistency and sustainability have been words mostly used in policy arena to measure commitment and degree of success. This is more important in the financial system, where otherwise means a lot, particularly for operational reasons and signal to foreign investors.
The Financial System Strategy (FSS) 2020, initiated during the reign Prof. Chukwuma Soludo as the Governor of the Central Bank of Nigeria (CBN), remained the toast of the institution and enhanced till date. It has also till date, given impetus to the pursuit of the Financial Inclusion project of the country.
Of course, the project has as its objectives, to develop a shared vision and an integrated strategy for the nation’s financial system. In fact, it is aimed at creating a financial hub- cluster of financial activities with strong presence of international financial institutions. It is a deliberate pursuit of well-developed integrated financial system that is imbued with efficiency in mobilization and intermediation of fund/capital from all stakeholders.
Though these objectives are varying stages of achievements due to peculiar challenges of the economy, the truth is that the nation’s financial landscape has not been the same and continues to evolve.
Behind whatever positive developments since its inception 12 years ago, it has been under the care of its pioneer Coordinator and Deputy Governor, Corporate Services, Alhaji Suleiman Barau. To him, the project has been vocation.
“In measuring the milestone of FSS 2020 so far achieved, we have to look at them from the existing sectors’ perspectives. For Mortgage Sector, a robust secondary mortgage has been created with the Central Bank of Nigeria and the Mortgage operators clearly streamlined, which has led to the establishment of the Nigeria Mortgage Refinancing Company (NMRC).
“Again, the Uniform Underwriting Standard which was nonexistent has now been codified and introduced in the Mortgage Industry to regulate their practice. In addition, the framework for the Mortgage Asset Registry has been developed to capture Mortgage transactions on a common IT platform.
“The CBN has also introduced the categorization of Primary Mortgage Banks into National, State and Local. The Pension asset has grown from about N3 Trillion in 2013 to N6.02 Trillion in 2017. The Nigerian Sovereign Investment Authority (NSIA) has been appointed advisers to manage the deployment of Pension funds into long term infrastructure deployment.
“Through sensitisation and mass advocacy, PenCom has stepped up prompt settlement of pension claims for retirees and is embarking on massive technical trainings using the IT platform to ensure prompt service delivery and implementation of the Micro pension scheme,” he said.
For the Insurance Sector, he noted that the Micro insurance (Takaful) and compulsory insurance schemes are being implemented, with improvement in the settlement of insurance claims of policyholders being pursued as confidence and trust of the holders, which was at lowest ebb now being restored.
There is also evidence of capacity building of insurance and inclusion of insurance in the school curriculum for prompt service delivery. For MSME Sector several intervention to improve funding and access to finance for Small Businesses. Also creation of the National Collateral Registry for lending’s and access to finance by SMEs is a huge milestone, especially with the passage of the Secured lending using movable assets Bill by the NASS.
Barau admitted that notwithstanding the milestone, there are some challenges militating against the achievements of FSS2020 objectives, including but not limited to funding and logistics, technical challenges, human capital development, especially the inability to attract talent from abroad to Nigeria, delays in the passage of the identified financial sector bills by the National Assembly, policy changes and lack of continuity.
He also recalled that it is envisage that the International Finance Corporation (IFC), partner in developing the framework, will be a country within a country with its municipal laws to be dictated by their necessity, with incentives likely to be derived from any investor. For example, the competitive corporate and tax rates, competitive VAT on product and serves, currency convertibility, flexible expatriate quota limit, one-stop-shop approach to business registrations and other permits, 100% repatriation of funds, access to Nigeria double taxation treaties, 100% foreign ownership permitted, low cost quality information services and internationally accepted investment regulations.
Speaking on the essence of the FSS 2020, he said it is just a platform that brings together all the key implementing institutions to achieve a common objective in the financial system.
“Since actual implementations are being done by these agencies, our attempt is to identify where there are challenges or issues or duplication of efforts, FSS2020 call the attention of the affected institution to address it in the overall interest of the financial system. The FSS2020 initiatives were carefully tailored to align with the mandate of these institutions that have the responsibility to implement the identified initiatives which is within the realm of the FSS2020 Objectives.
“For Instance, CBN has achieved a lot in the areas of Payment System Vision 2020 which is an Initiative of the FSS2020 along with the Cashless policy. In the same vein, SEC has been successful in the implementation of the E-dividend policy which has always been one of the initiatives FSS 2020 had been advocating, and so many others.
“Also, the funding of FSS 2020 Programme had been solely the borne by the CBN, until recently when some of the implementing institutions like PenCom have started making contribution to the funding of the FSS2020 Activities with others showing interest to do same. Most of the implementing Institutions have been providing technical assistance to the running of the programme in the areas they are more specialized,” he said
Barau said there is need to sustain policies that will ease the doing of business in Nigeria and encourage investment within the country; ensure that there is enabling infrastructure and guarantee maximum peace and security in the country.
Also the development plan of government must have bearing with the needs and realities of the citizenry, especially issues of unemployment, microeconomic stability and capacity building in all sectors of the economy.