The chairman of the United Bank for Africa (UBA), Tony Elumelu, has said the main challenges that the banking sector faces are regulatory and compliance cost.
He made his comment on Tuesday at the Chartered Institute of Bankers of Nigeria (CIBN) 17th annual banking and finance conference in Abuja.
According to Elumelu, the banking sector provides crucial financial support to Nigeria.
The businessman, however, said the sector’s ability and efforts to contribute to the country’s economic growth are being suffocated by challenges.
“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.”
Consequently, Elumelu said by working together, a more strong banking sector that drives economic growth and supports the aspirations of Nigerians can be built.
“The success of 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 the 17th of July, President Tinubu told the national assembly to amend the 2023 Finance Act to impose a one-time windfall tax on banks’ foreign exchange (FX) gains.
Nevertheless, the national assembly hiked the windfall tax on banks’ FX gains to 70 percent — from the proposed 50 percent — in the amended Finance Act 2024.
The decision had incited concerns among professionals in the financial sector.
But Elumelu said that he absolutely supports the implementation of the windfall tax on banks’ FX gains.