CBN: Naira has lost 85% of its value in two years

The Central Bank of Nigeria, CBN, has revealed that the nation’s currency has lost about 85 per cent of its value in the last two years, harping on the need for risks managers in banks to brace up to the risks facing the banking sector.

The Director, Banking and Payment System, CBN, Mrs. Tokunbo Martins, stated this at the weekend in a presentation made at a round-table discussion organised by the Risk Managers Association of Nigeria, RIMAN, in Lagos.

She said the Nigerian economy, including the banking sector, was facing various kinds of risks as a result of the challenges of high inflation, naira depreciation, oil price crash and decline in manufacturing output.

The CBN director then called on risk managers to rise to the task of maintaining robust risk management practice in the banking sector.

“There is a need to avoid the situation the world experienced during the global financial crisis through the use of regulations and standards. During the global financial crisis, risk managers got significant amount of the blame.

“The nation’s Gross Domestic Product has contracted by 2.2 per cent, inflation has gone up to above 18 per cent, the currency has depreciated by about 85 per cent in the past two years, and manufacturing has contracted by three per cent,” she said.

The member of the Board of Trustees of RIMAN further stated that, “The oil that we produce, apart from the price, has fallen by about 70 per cent. The volume has also contracted a great deal and banks are exposed to manufacturing, oil and gas, and to the government.

“The government’s revenue has declined. Non-performing loans have increased. We do have a very cocktail of risks in our hands. What is the future of risk management? It is more and more regulation and standards.”