Billionaire Tony Elumelu Names Two Challenges in Nigerian Banks
- Tony Elumelu stated that two of the most significant problems the banking sector is facing are regulatory and compliance costs
- The Nigerian businessman asserts that the banking sector provides crucial financial support to the country
- He said these barriers are preventing the industry from reaching its full potential and thwarting efforts to aid growth
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
Regulatory and compliance expenses are two of the biggest issues facing the banking industry, according to Tony Elumelu, head of the United Bank for Africa (UBA).
Source: UGC
Elumelu said this while delivering a speech on Tuesday at the 17th annual banking and finance conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja.
The Nigerian businessman claimed that the nation receives vital financial support from the banking industry.
However, he claimed that obstacles are impeding the sector's potential and attempts to support Nigeria's economic expansion.
“Our banking sector is a cornerstone of Nigeria’s economy. The transformation of our banking sector over the last few decades is one of our success stories,” Elumelu said.
“The sector employs millions, provides crucial financial support to countless businesses, and generates income for millions of shareholders.
“However, the sector faces challenges that impede its growth and innovation, including regulatory and high compliance costs.
“To overcome these challenges, stakeholders — including government agencies, regulatory bodies, and banking institutions — must engage in constructive dialogue to foster a collaborative environment.”
More cooperation needed
Thus, he claimed that cooperation will enable the development of a more resilient banking industry that promotes economic expansion and upholds Nigerians' ambitions.
“The success of the Nigerian banking sector is felt beyond Nigeria. Nigerian banks have become multinationals, leading the sector across Africa, establishing themselves in the world’s financial capitals – and in doing so, they have changed how our country is perceived, created pathways to opportunity and set themselves up as role models for our other industries,” he added.
On July 17, Tinubu requested that the 2023 Finance Act be amended to include a one-time windfall tax on the foreign currency (FX) gains of banks.
The national assembly did, however, revise the Finance Act 2024 to raise the windfall tax on banks' foreign exchange gains from the projected 50 percent to 70 percent. Financial industry executives expressed anxiety over the move.
Elumelu did, however, state that he is in favour of imposing a windfall tax on banks' foreign exchange earnings.
Elumelu explains why he stepped down as CEO
Legit.ng reported that the founding and growth of Heirs Holdings Group was spurred by the Central Bank of Nigeria's (CBN) policy, which limits the term of bank CEOs to ten years, according to Tony Elumelu, the chairman of the company.
Elumelu had to step down as the CEO of United Bank for Africa (UBA) and name a new CEO for the bank because the CBN 2010 rules for banking sector operations had imposed a maximum term limit of 10 years for bank CEOs.
Speaking at the 14th-anniversary celebration of Heirs Holdings Group in Lagos, Elumelu said that rather than being disappointed by the policy shift; it encouraged him to look more broadly and take advantage of the opportunities it presented.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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