The Central Bank of Nigeria has calmed the nerves of stakeholders in the banking industry who are worried over the impact of UK’s surprise vote to leave the European Union (BREXIT) on the sector.
This is against the background of concerns by Nigerians on the negative consequences on Nigerian economy considering its strong economic ties with Britain, as a member of the British Commonwealth.
But Moses Tule, director monetary policy department, said at the weekend in Lagos that there is nothing to be worry about.
Speaking at a breakfast session organized by Chartered Institute of Bankers of Nigeria Centre for Financial Studies (CIBNCFS), a subsidiary of the Chartered Institute of Bankers of Nigeria (CIBN), Tule said that financial institutions are more regulated presently, adding that banks are more capitalized and the system more equipped to deal with the situation.
According to him, crisis in UK will not affect any Nigerian banks especially those lenders that holds subsidiaries abroad.
Segun Ajibola, president/chairman of council, CIBN, said BREXIT has implications on Embassies and diplomatic relations in terms of visa issuance, territorial matters, among others.
he also looked at the intergovernmental relationships, implications on European Union, trade agreements, other global economic union, currencies and exchange rate regimes, and so on.
For Nigerian banks, he said it throws open a number of pressing issues, including, lending and borrowing relationships entered into under the Aegis of Europe, correspondent banking relationships entered into on the strength of Europe, the impact on assets and liabilities in GBP and Euro currency given possible depreciation and appreciation in those currencies, treatment to be given to the differentials in currency values in the books of banks under the IFRS, impact on banks open position as designated in those currencies and impact on bank customers whose deposits and assets are in affected currencies.
Other experts who spoke during the panel discussion are Biodun Adedipe Chief Consultant B Adedipe Associate limited, Femi Awoyemi, Chief Executive Officer, Proshare Nigeria Limited, Bisi Lamikanra, patner and head, management consulting unit, KPMG, and Ayandiji Aina, vice chancellor, Caleb University.
Adedipe said that with the Bilateral trade between Nigeria and the UK, currently valued at six billion pounds and projected to reach about 20 billion pounds by 2020 could be affected.
He stressed that a decelerating British economy could impact a drop in investment, trade, and also remittances from the Nigerian Diaspora who sent home over 20 billion dollars in 2015.