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Nigeria sees surge in active bank accounts — NIBSS



By Sodiq Adelakun

In a significant financial development, Nigeria’s banking sector has witnessed a substantial increase in the number of active bank accounts, according to the latest figures released by the Nigeria Inter-Bank Settlement System (NIBSS).

The total number of active bank accounts in the country soared to 151 million in 2022, marking a 13 percent rise from the 133.5 million active accounts reported in the previous year.

The detailed NIBSS report highlights that individual accounts constitute the lion’s share of this growth, accounting for 96.6 percent with a staggering 146 million active accounts. Corporate accounts make up the remainder.

Further analysis of the data reveals a 14 percent increase in current accounts, which reached 56.9 million in 2022, up from 49.8 million in 2021. Savings accounts also saw a robust growth of 16 percent, climbing to 139.2 million from 120.4 million the year before.

Despite the positive trend in active account usage, the country also recorded a rise in the number of inactive bank accounts.

The total stood at 72.8 million for the year 2022. Consequently, the overall bank accounts in Nigeria, as of December 2022, numbered 223.8 million, with 151 million in active use.

This represents a 26 percent increase, equating to an additional 14.9 million inactive accounts, compared to the end of 2021 when the number of inactive accounts was 57.9 million, as per NIBSS data.

Industry experts have pointed to a variety of reasons behind the growth in inactive accounts across the country. The expansion in the banking sector is indicative of a broader financial inclusion strategy and reflects the growing engagement of Nigerians with formal financial services.

However, the concurrent rise in inactive accounts suggests that there are still challenges to be addressed to ensure that these services are continuously utilised by account holders.

This shows an increase of 26 percent or 14.9 million increase in the number of inactive bank accounts for the year. At the end of 2021, inactive bank accounts stood at 57.9 million per NIBSS data.

Industry analysts have cited several factors for the increasing number of inactive accounts in the country.

 According to them, these include an increase in the prices of goods and services, low income accompanied by the low purchasing power of Nigerians, increasing rate of unemployment, and immigration among others.

An inactive or dormant account is a bank account that has had no activity on it for 12 months.

Banks convert accounts with no activity for a long period into inoperative or dormant accounts to curtail the risk of fraud. By segregating the accounts, banks bring to their workers’ attention the risk involved in these accounts and call for their due diligence.

Money market

FG urges NIPSS members on creative solutions to national challenge



The Minister of Budget and Economic Planning, Atiku Bagudu, has urged members of the National Institute for Policy and Strategic Studies (NIPSS), to devise creative solutions to Nigeria’s social and economic challenges.

Bagudu received  participants of the Senior Executive Course 46 of the institute in his office on Monday in Abuja.

According to him, some of the issues confronting Nigeria  as a nation might require out of the box solutions.

“The NIPSS was created in the wisdom of our forefathers, to train senior management personnel that can bring unusual solutions to problems confronting us,” he said.

He urged the participants to eschew self-interest and make decisions that can assist the nation to make better choices.

Bagudu  said that the national planning function of the ministry comes from the National Planning Commission.

He said that the digital economy is one area that the ministry was looking at for mass youth engagement and economic prosperity.

“Digital economy is an evolving process.which the country will have to leverage digital for overall growth and development.

“It is a new reality. Today trading platforms are closing shop and increasingly going digital.

“Nigeria needs to respond positively and reap benefits from the digital economy. But we have to make the space safe through effective regulation.

“Some countries have data protection laws which enable them to check and regulate excesses in the digital space,” he said.

The Minister commended the law enforcement agencies for promptly going after digital platforms like Binance, which was used to disrupt the foreign exchange market and to weaken the Naira.

He also commended the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, for his various monetary policy decisions that restored confidence in the Nigerian economy.

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Money market

Cardoso to speaks at IMF meeting on FX reforms



The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso will speak on foreign exchange (FX) market reforms at the ongoing International Monetary Fund (IMF) Spring Meetings on Wednesday in Washington D.C.

The meetings of the Boards of Governors of the IMF and the World Bank Group (WBG) bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organisations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

Also featured are seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world’s financial system

Cardoso assumed office as the Governor of the CBN in September 2023. Since then he has introduced some new FX policies and adjusted some existing ones to ensure the stability of the naira.

According to Cardoso, the exchange rate in Nigeria has increased/depreciated due to the simultaneous occurrence of two factors: a decline in the supply of US Dollars coinciding with a surge in the demand for US dollars.

He said in February 2023 that the foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira. Factors contributing to this situation include speculative forex demand, inadequate forex supply due to non-remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.

To address exchange rate volatility, he said a comprehensive strategy has been initiated to enhance liquidity in the FX markets.

This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for BDCs, enforcing the Net Open Position limit, and adjusting the remunerable Standing Deposit Facility cap.

As part of measures to control inflation and stabilise the naira, the CBN last month raised its benchmark interest rate, known as the Monetary Policy Rate (MPR) by 200 basis points to 24.75 percent from 22.75 percent in February 2024.

In her second term message, Kristalina Georgieva, IMF managing director, who was recently reappointed by the executive board of the IMF, said, “I am deeply grateful for the trust and support of the Fund’s Executive Board, representing our 190 members, and honoured to continue to lead the IMF as managing director for a second five-year term.”

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Money market

PenCom recovers N12.45bn from erring employers



The National Pension Commission (PenCom) said it has recovered N12.45 billion from employers that failed to contribute towards their employees retirement.

The recovery would indeed help in wealth creation for the workers, thereby securing them against old age poverty in retirement.

PenCom in its 4th quarter 2024 report, said it has maintained the services of Recovery Agents (RAs) for the recovery of unremitted pension contributions and penalties from defaulting employers.

It submitted that during the quarter, the sum of N319,468,587.45 comprising principal contributions N128,176,029.95 and penalties N191,292,557.50 was recovered from 32 defaulting employers.

It noted that meanwhile, the Commission Secretariat/Legal Advisory Services Department had been requested to take legal action against 4 defaulting employers.

The pension industry regulator maintained that from the commencement of the recovery exercise in June 2012 to 31 December 2023, a total sum of N25,447,085,186.71 comprising of principal contributions N12,929,415,445.52 and penalties N12,517,669,741.19 was recovered from defaulting employers.

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