How my decision delayed telcos’ entry into Nigeria’s financial space — Sanusi Lamido

Former Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, has admitted that he would have made some decisions differently during his tenure, particularly his decision to delay the entry of telecommunications companies into Nigeria’s financial services sector.

Mr Sanusi, who is the Emir of Kano, said he was responsible for delaying the entry of telcos into the financial services space, a decision he now believes limited the pace of financial inclusion.

The monarch made the disclosure during a fireside chat on financial inclusion in Abuja on Wednesday, when asked what he would do differently if given another opportunity to lead the CBN.

Mr Sanusi said he could identify three areas where he would have acted differently, but disclosed only one of them during the discussion.

“One of them was on financial inclusion. I’m responsible for delaying the entry of telcos into this space,” he said.

Mr Sanusi served as CBN governor from 2009 until his suspension in February 2014. During his tenure, he oversaw major reforms of Nigeria’s banking sector following the 2009 banking crisis.

Telcos Delay

Mr Sanusi explained that his decision was influenced by concerns arising from Nigeria’s banking crisis at the time, particularly over the regulation and control of funds.

“Part of the challenge, of course, was that we had just come out of a banking crisis, where we were worried about illicit funds. And I wasn’t comfortable allowing companies that I was not the primary regulator of to have access to a huge pool of funds,” he said.

He acknowledged, however, that the decision, despite being based on concerns he considered valid at the time, ultimately had unintended consequences.

“So again, this is one case where you have a good intention, where you take a wrong decision,” Mr Sanusi said.

He said he opposed the proposal despite pressure from stakeholders in the financial sector.

“I fought the World Bank. I fought everybody. I fought Stanbic. I fought everybody who suggested it,” he said.

With the benefit of hindsight, however, Mr Sanusi said allowing telecommunications companies into financial services earlier could have accelerated financial inclusion.

“I do think if I had allowed that to happen, we would have made much more progress,” he said.

According to him, telcos have an advantage over traditional banks due to their extensive nationwide reach.

“I think we made more progress in the last few years than we did in the first because the banks simply don’t have the boots on the ground. They don’t have the footprints to do it,” he said.

Beyond financial access

Mr Sanusi’s reflection came during a broader discussion on how Nigeria can move from simply expanding access to financial services to ensuring that financial inclusion produces tangible economic benefits for households.

He argued that financial institutions alone could not create economic prosperity, saying appropriate fiscal and structural policies must support financial-sector reforms.

“We have the infrastructure. We have the base. The question is, how do you now build on that?” he asked.

He also called on the CBN to leverage data generated by fintech and payment companies to develop savings, pension and insurance products for underserved Nigerians.

“If I were in the Central Bank today, I would call in MoneyPoint and OPay and say, ‘Guys, you have all this data. You are transferring money. Tell me how you can build pension products on top of this. How can you build savings for us on top of this?’”

Mr Sanusi said the extensive reach of payment companies could be used to connect low-income Nigerians to financial products, particularly savings and insurance.

He also stressed the importance of financial literacy, saying Nigerians should be encouraged to build savings gradually through small, regular contributions.

Regulatory coordination

The former CBN governor also called for better coordination among Nigeria’s financial regulators, particularly in consumer protection.

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He expressed concern about potential overlaps between the CBN’s consumer protection functions and those of the Federal Competition and Consumer Protection Commission (FCCPC).

According to him, consumers could become confused when different regulators have overlapping responsibilities for complaints involving financial institutions.

He suggested that regulators should establish a clear responsibility matrix defining their respective roles.

“Draw a RACI matrix and let everybody know where their lines of responsibility are,” he said.

Mr Sanusi said consumer protection was critical to financial inclusion and that regulatory fragmentation could undermine confidence in the financial system.

He disclosed that while he had identified three things he would have done differently during his tenure as CBN governor, he would leave the other two for his forthcoming book.

“Now, the other two, you’ll have to wait for my book,” he said.