Amaka Obiefuna

The Honourable Minister of Finance, Budget & National Planning, Dr. (Mrs) Zainab Shamsuna Ahmed has Commended the Nigerian Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN) for protecting depositors’ funds in the face of the global economic challenges that have continued to undermine the safety and stability of the financial system.

The Finance Minister gave the commendation  in Abuja at the 2022 International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) Technical Assistance Workshop.

The Minister in her keynote at the workshop hosted by the Nigeria Deposit Insurance Corporation (NDIC) with the theme ‘‘Normality in Turbulent Periods: The Stabilizing Role of Deposit Insurance,’’ commended the two agencies for their resilience and effectiveness in the face of global economic challenges.

According to her, “the Nigerian economy, like others, felt the brunt of the global economic distortion, having to go into recession twice in the space of five years. However, given the resilience of the nation’s financial system, we came out within months.

“We also make bold to say that despite these economic challenges, no depositors’ fund was lost given the effectiveness of our agencies, most especially the CBN and the NDIC.

The Finance Minister also noted the function of Deposit Insurance System (DIS) which she said provide financial guarantee to protect depositors in the event of bank failure forms a critical component of the financial safety-net arrangement, adding that the guarantee offered by the DIS plays a major role in strengthening depositor confidence in the financial system during crisis.

“Deposit insurers play an effective role during crisis by way of performing the roles and responsibilities as stipulated in their mandates. 

The NDIC, which was established in 1989, with a mandate of a ‘risk minimizer,’ has since inception and most especially during critical times been able to allay the fears of depositors through its wide array of public enlightenment/education programmes, collaboration with the CBN in the efficient supervision of insured institutions to promote sound risk management which reduces likelihood of failure and effective resolution of failing banks. All these have helped to improve public confidence, protect depositors and promote the stability of the Nigerian financial system,” she explained.

She maintained that success recorded by NDIC can be attributed to the effective collaboration with other safety-net participants in Nigeria, particularly the CBN, the Federal Ministry of Finance and other members of the Financial Services Regulation Coordinating Committee (FSRCC). The Federal Ministry of Finance is held in some quarters, for example in Nigeria, as a critical safety net participant that oversees the fiscal policy.

The Finance Minister said the Ministry under my watch has implemented a set of difficult but necessary reforms as well as successfully engaged international partners to help the country navigate an extremely challenging economic environment. 

That, she said, to a great deal, in collaboration with the CBN, NDIC and other agencies, explains why the country’s Gross Domestic Product (GDP) rose to 3.54% year-on-year in the second quarter of 2022.

The GDP growth, according to her, marks the seventh consecutive quarter of GDP growth, since the recession recorded in Q3 2020.

She said “the Nigerian economy has so far shown signs of resilience in the face of economic headwinds like the conflict between Russia and Ukraine, which affected the global economy.”

While tracing the history of the establishment of the IADI, Mr. Shamsuna commended the foresight and vision of the leadership and members of the Deposit Insurance System (DIS), whose belief in a virile financial system led to the establishment IADI in 2002 just as she acknowledged the role being played by African countries in IADI, through the ARC, in sharing deposit insurance expertise and knowledge as well as contributing to financial system stability in Africa.