SPEECH DELIVERED BY THE PRESIDENT OF THE SENATE, FEDERAL REPUBLIC OF NIGERIA, HIS EXCELLENCY, SENATOR (DR) ABUBAKAR BUKOLA SARAKI, AT A ONE-DAY PUBLIC HEARING ORGANIZED BY THE SENATE COMMITTEE ON BANKING, INSURANCE AND OTHER FINANCIAL INSTITUTIONS HELD ON WEDNESDAY 8TH FEBRUARY, 2017.
1. It is with great pleasure that I welcome you all to this very important one-day public hearing organized by the Committee on Banking, Insurance and Other Financial Institutions. I thank the committee for the very impressive job they have been doing with bills referred to them so far in the course of our legislative duties. I appreciate all our special Invitees for finding time out of your very tight schedules to honour this invitation. I consider your presence a demonstration of your commitment to the development of our country through effective lawmaking. Please accept our gratitude as always.
2. This hearing is specially organized to critically examine and collate inputs on three priority Bills of the 8thSenate.
These Bills are:-
i. The Legal Framework for Credit Bureau Services Bill 2017 (SB 205);
ii. The National Payment System Bill, 2017 (SB 005) and
iii. The Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, CAP F34 LFN, 2004 (Amendment) Bill, 2017 (SB181).
3. Distinguished colleague, Invited Guests, the 8th Senate has made the issue of the review of laws affecting the business environment the main plank of its legislative focus. This is in order to give the private sector a lift as the main driver of economic development.
4. One of the fallouts of the current economic challenges we face is the over reliance of the economy on the public-sector funds and performance. With the ongoing economic realities, it is obvious that unless we restructure our economic scheme to a more business friendly structure that enables our people to harness their potential for enterprise we are not going to build a sustainable 21st century Nigerian economy.
5. The purpose of these priority bills we are considering here today is to open the economic space to attract greater private sector investment especially those that enable small business investments to thrive and therefore create more jobs for our people within a friendly business climate. This overarching objective cannot be achieved by the Senate alone without consulting with you, our stakeholders. This we do through public hearings in order to ensure that the final product of our legislative decisions are well thought out, comprehensively interrogated and exhaustively reviewed.
6. Distinguished ladies and gentlemen, the LegalFramework for Credit Bureau Services Bill, 2017 one of the priority bills we have listed here, seeks to promote the use of credit information, access to finance, knowledge of credit bureaus to improve the lending environment in Nigeria.
7. This bill adds a very critical scheme that will aid Credit Risk Management and reduce significantly the incidence of Non-performing Loan Portfolio in the system.
This bill goes beyond being an assessment tool for financial inclusion, it is a social re-engineering tool that will soon be useful to both the labour market and the education sector in the evaluation of behaviour and performance in such a manner that reduces risks across all baselines.
8. The bill especially seeks to remove the clog on the wheel of access to credit. The implication is the expansion of the band of those technically able to access credit through a more scientific, objective, less subjective and neutral review as credit houses will now have the tools to provide credits to Nigerians for economic activities that have direct positive impact on the national economy more readily and in a cost effective way having reduced to the barest minimum the risk of default through delinquent behaviours.
9. The global trend has been for government to create enabling environment and establish well defined institutions that regulate credit flow. The incidence of non-performing loans which today has grown to almost 2.5trillion in volume, would by this bill be reduced as amajor obstacle to access to credit and capital formation in the country.
10. The National Payment System Bill, 2016, is another important bill that the Senate has identified through the report of the technical committee on the review of business laws. This bill is slated as a critical framework necessary to help modernize the Nigerian financial services market.
11. The bill aims at providing the regulatory oversight of the National Payments System. It will engender a veritable scheme for controlling and monitoringpayment institutions, authorities to ensure that at all times they serve the best interest of the consumers andensure the licensing process is transparent and efficient.
12. The Payment system law is the legislative infrastructure that would enable for efficient transfer of monetary values between parties discharging mutual obligations. Its technical integrity determines the efficiency with which monetary transaction instruments are used in the economy and the associated risks. Due to the development in the payment systems in the economy it has become imperative to enhance the safety and efficiency of these systems in order to reduce systemic risks, as well as minimize credit risk.
13. The overall vision is to create a framework that would enable the development of a robust and efficient payment system network between financial systems and system participants, which could reduce and eventually eliminate the use of manual and paper-based procedures. It is expected also to help strengthen the enforcement of strict security measures both for physical and electronic access to the system and ensure measures for business continuity and resilience across the national payment systems.
14. Distinguished colleagues, ladies and gentlemen, The Bill on Foreign Exchange (Monitoring and Miscellaneous Provisions) Act CAP F34, LFN, 2004 (Amendment) Bill, 2016 is the third bill this public hearing will be considering. This bill seeks to establish an autonomous Foreign Exchange Market and provide for the monitoring and supervision of transactions conducted in the market.
15. The strength and status of a country’s economy depends largely on how robust its financial markets are and how much its foreign exchange market is in tune with international best practices. There is no gainsaying therefore that foreign exchange control is essential economic management tool especially targeted at exchange market management. The reform intended here is targeted at preventing an adverse effect on our balance of payments.
16. The aim of the Bill is to establish a foreign exchange market that adequately serves the Nigerian economy and avoids ultra-market force manipulation, hence contributing immensely to the development and growth of our national economy.
17. Distinguished ladies and gentlemen, the overarching task before us is one of repositioning the banking and financial sector of our economy to operate within a free market regime that protects the Nigerian consumer and is immune to manipulation and less susceptible to the black market. One in which the banks are able to provide financial intermediation role in a manner that is pro-business. It is hoped that this public hearing would lead to a better financial services sector that would enable our businesses to thrive.
18. The Senate will be awaiting your report within time on these bills with a view to receiving from you the indispensable advice on how to proceed with these bills to achieve our stated objective of improving the business environment and attracting investment into the Nigerian economy.
19. Once again, I wish to thank everyone here for honouring this national call. I wish you very successful deliberation.
20. It is my pleasure therefore to declare the Public Hearing open.
21. Thank you all and God bless you the Federal Republic of Nigeria.
PRESIDENT OF THE SENATE