The investment firm made this known during its Afrinvest Meetup held in Lagos, where executives sat face-to-face with users, retail investor, finance creators and influencers in what became an unusually open conversation about the company’s technology problems, customer frustrations and resolutions future plans.

At the centre of the discussion was Afrinvest’s renewed drive to win back investor confidence after recent platform glitches that triggered backlash online and complaints from users over delayed settlements, duplicated trades and customer support gaps.

Speaking during the session, Ike Chioke, group managing director of Afrinvest (West Africa) Limited, admitted the firm had learned difficult lessons from the experience and would use the feedback to improve its systems.

“I can assure you that we’re going to take all of this feedback and integrate the systems and processes, and then figure out how to come up with a better application,” he said.

Chioke said one of the biggest realities the company had to confront was the gap between financial products and the average Nigerian investor.

The meetup focused heavily on Afrinvestor 2.0, the company’s upgraded investment platform, which executives said now includes improved security, easier onboarding and a new IPO subscription feature designed to handle upcoming public offers, including the expected Dangote Refinery IPO.

During a product showcase led by Taiwo Ogundipe, managing director of Afrinvest Securities Limited, the company demonstrated how users can subscribe to the IPO directly through the app.

Ogundipe explained that users can now access Nigerian equities, treasury bills, commercial papers, bonds and public offers from one platform.

Victor Ndukauba, deputy managing director, Afrinvest, said at the event: “Afrinvest today is well positioned for the upcoming Dangote Refinery IPO.”

The company also used the event to address the multiple trade execution issues that affected thousands of users earlier in the year.

Ndukauba explained what happened behind the scenes, saying the issue involved failures between external trading infrastructure providers and exchange systems.

“94,000 clients were affected,” he disclosed, explaining that unstable connections between systems triggered repeated order execution loops during trading sessions, forcing the company into weeks of investigations with technology providers and market infrastructure operators.

“We restored all the accounts to where it was,” he said. “Clients come first. No client would ultimately bear losses from the incident.” 

During the feedback session moderated by Margaret Ofem, head of Customer Success, users challenged the company over poor communication, confusing user experience and delayed complaint resolution.

Rather than avoid the criticism, Afrinvest executives spent hours responding point by point.

Ndukauba acknowledged the challenges, adding that Afrinvest is now redesigning its support structure to scale faster during complaint spikes and improve response times across email, calls and social media.

The company also revealed that it is working on integrating banking services directly into the investment ecosystem after acquiring a microfinance banking entity.

Chioke said the integration would eventually turn the investment app into a full financial platform where users can invest and save from one account.

“The same app you’re using becomes a bank account effectively,” he said.

“There will be no firm that can offer that kind of platform because of the integration of investment and savings.”

Afrinvest executives also disclosed that discussions are ongoing around cross-border investing within Africa.

According to the firm, the goal is to eventually allow users to buy shares across markets including Ghana and Kenya from a single platform, although regulatory approvals and settlement systems are still being worked out.

“We have already done some work around making it possible for other people to invest in Nigeria,” Ogundipe said.

“So that very soon within the Afrinvest stock app, you will begin to see shares from Ghana, from Kenya.”

The company said investor education would also become a bigger priority going forward, especially as more first-time investors enter the market.

Executives admitted many Nigerians still struggle to understand how investing works, despite increased interest in stocks and wealth creation products.

Victor Ndukauba, deputy managing director of Afrinvest, said retail investing in Nigeria has changed significantly in recent years.

“A few years down the line, nobody really cared about buying stocks or buying mutual funds,” he said. “That mindset is beginning to change.”

Afrinvest intends to stay long-term, despite the recent challenges. “We are not a wonder bank, and we are here for good,” Chioke said.

“We’ve been here since 1995, 30 years, and we’ll be here for another 30 years and beyond.”

This was disclosed by Dr Ike Chioke, the chairman of the Fund, in Enugu recently, during a town hall meeting to brief residents and stakeholders on its activities, achievements, and funding needs.

He explained that the target was necessary to sustain a community-based security structure across the  260 political wards in the state, noting that effective security requires not only equipment but also sufficient personnel on the ground.

According to Chioke, the plan is to deploy at least 20 security personnel in each ward, whose responsibility would be to monitor communities, detect unusual activities, and promptly relay intelligence to security agencies.

“We need to raise at least N5 billion every year for the fund to function efficiently. If you consider the 260 wards in the state and deploy about 20 security personnel in each ward, paying each of them monthly, the financial implication becomes clear,” he said.

Dr. Chioke stressed that security requires “boots on the ground”, describing community-based intelligence gathering as a critical component of effective crime prevention.

He explained that the Fund operates as a public-private partnership, where government provides support while citizens, corporate organisations, and other stakeholders contribute resources to strengthen the state’s security architecture.

The chairman, however, expressed concern that several donors who made public pledges during the 2025 fundraising drive had yet to redeem their commitments.

“During the fundraising, about N3 billion was pledged, but only around N1.3 billion has been redeemed so far. Some people announced donations of up to N100 million but have not paid a kobo,” he noted.

Chioke therefore appealed to residents, businesses, and members of the diaspora to support the initiative, stressing that collective contributions from many citizens can significantly strengthen security across the state.

He recalled that the Fund, inaugurated by Governor Peter Mbah in February 2024, had since established a functional operational framework, including a dedicated website and payment portal to facilitate contributions from individuals and organisations.

According to him, funds realised so far have been deployed to procure security equipment to enhance operations across the state.

The items include two surveillance drones equipped with infrared cameras, 10 Hilux patrol vehicles, 40 motorcycles for forest guards, and 400 bulletproof vests and helmets.

He added that the equipment had significantly strengthened ongoing efforts to tackle security threats such as kidnapping and farmer-herder conflicts, noting that statistics indicate that incidents of kidnapping and related crimes in Enugu State have dropped by over 80 percent since the current administration came into office.

Representing Governor Peter Mbah at the event, Prof. Chidiebere Onyia, the secretary to the State Government, commended the board of the Trust Fund for creating a platform that enables citizens to actively participate in strengthening security in the state.

Prof. Onyia said the establishment of the ESSTF forms part of the administration’s broader strategy to build a sustainable security architecture anchored on transparency, accountability, and collaboration between government and citizens.

He noted that the improved security environment in the state had helped stimulate economic activities, contributing to the significant growth in the state’s Internally Generated Revenue (IGR) in recent years.

Also speaking, Vincent Onyeabor, the senior special assistant to the Governor on Security Matters, said the government continues to address security concerns across different parts of the state, noting that criminal elements often move across state borders to perpetrate crimes.

In his remarks, Igwe Samuel Ikechukwu Asadu, the chairman of the Enugu State Traditional Rulers Council, called for greater public visibility of suspects arrested through the deployment of surveillance drones and other security operations in order to strengthen public confidence.

He also urged that traditional rulers be involved in the recruitment of forest guards, stressing that community participation remains essential in sustaining security across the state.

The newly unveiled assets include two advanced surveillance drones, 10 Hilux 4×4 patrol vehicles, 40 motorcycles, 400 bulletproof vests, and 400 bulletproof helmets.

Speaking during the inauguration ceremony held on Monday at the Government House, Enugu, Governor Mbah expressed appreciation to the ESSTF Board of Trustees for their continued commitment to enhancing security in the state.

He noted that the new equipment will reinforce the administration’s ongoing investments in public safety, such as the state-of-the-art Command and Control Centre, AI-powered surveillance cameras deployed across the state, and more than 150 Distress Response Squad vehicles equipped with AI-enabled cameras.

He observed that the administration’s achievements and humongous vision would have come to naught without the security of lives and property, but assured that his government would not rest on its oars and would continue to cooperate with the President Bola Tinubu Administration, which he said was working tirelessly to make sure the country is safe and secure.

“The security challenges we are having are local, and at the state level, we must also play our own role to ensure our localities are safe. So, these items will be deployed to ensure Enugu State remains the safest state in this country.

“We can confidently say that violent crimes have been reduced by over 80 per cent in Enugu State today. But as you know, we are not resting on our laurels because the criminals and bad elements we are dealing with are not resting, but are looking for any opportunity to breach our security.

“Security is one sector you may have scored 90 per cent, but just one breach can undermine all the successes you have accomplished. That is why we must invest heavily in equipment and infrastructure that enable us to nip crime in the bud and act quickly when one has been committed. That is why today’s event is reinforcing,” Mbah stated.

Earlier in his remarks, Ike Chioke, the chairman of ESSTF, who was represented by a member of the ESSTF Board of Trustees, Nath Udeh, said there was no longer any hiding place for criminals, adding that the inaugurated items would boost the governor’s efforts to position Enugu as the safest state to live and invest in.

He assured that ESSTF would do more, noting that the drastic improvement in security under the Mbah Administration was visible in the number of visitors and businesses presently coming into the state.

“Despite the number of flights now coming into Enugu, if you do not book on time, you do not get a seat. That tells you the amount of traffic now coming into Enugu. Some companies also want to have their retreats and a couple of assignments here in Enugu. These are signs to show that there is something nice happening here,” he added.

Throwing more light on the security items, the Executive Secretary of ESSTF, Engr. Chinedu Ani, explained that the two Vertical Take-off and Landing (VTOL) drones would enable operations in any kind of terrain, as they would not need a runway to take off.

“The drones also have a coverage and a range of 100km and as far as I know, from this spot (Command and Control Centre), which is where we normally take off, the longest air distance in Enugu here is 90km. So, it has the capability to go beyond Enugu State. And also, we can cruise at 120km per hour. They are quite fast.

“Each drone has several cameras, including thermal camera, night vision and daytime vision. Those cameras can zoom up to so many kilometres from the position of the drone. So, it is a very powerful equipment that has a lot of technologies. The cameras are also AI-equipped. So, they can do a lot of analysis. With the drones, we now have additional capability to track suspects, vehicles, and human beings anywhere within the state,” he explained.

Rev. Onyekachi Onyia, a Trustee of ESSTF and the Anglican Bishop of Enugu Diocese, justified the heavy investment in security, highlighting the state’s strategic place in the security and stability of the entire South East and the defunct Eastern Region.

“We know the consequences of leaving Enugu porous. If terrorists are able to get through Enugu, the South East is finished. It will not end well,” he stated.

Dozie died on April 8, 2025, a day before his 86th birthday.

Quoting from William Shakespeare’s Julius Caesar, in a statement on May 2, 2025, he  asserted that the deceased, whom he addressed as PGD (considering Gabriel, his middle name), was a metaphor of “calm and peace at the summit.”

Dozie was former chairman of MTN Nigeria; founder of Diamond Bank, which was acquired by Access Bank; founding member and former chairman of the Nigeria Economic Summit Group; and former President of Nigerian Stock Exchange.

Chioke stated,

“Long before I met PGD, I had heard of his entrepreneurial genius, innovative flair and educational philanthropy. To cite just one of the last elements, he had sponsored several people from my generation to Harvard Business School and other Ivy League institutions in the mid-90s. His motive was to influence the economic and financial future of Nigeria by empowering hundreds of young people to lead the nation into that future.”

He added,

“His vast educational philanthropy was never sporadic; it was an intentional, consistent, and sustained commitment to uplift others. He was preeminently ‘as constant as the northern star’ in his devotion to God and humanity.”

The Afrinvest boss said Dozie never sought accolades; accolades sought him.

Afrinvest, a Nigerian capital market holding company, is both a provider of research content on the Nigerian market and an advisor to blue-chip companies across West Africa on mergers and acquisitions as well as international capital market transactions.

Chioke couched Dozie’s virtue poetically, “In every interaction, PGD exhibited an uncommon fusion of strategic foresight and deep compassion. He listened more than he spoke; and when he did speak, he did so clearly, humbly and insightfully.

“His presence was never imposing, but was always commanding – he was a delight to follow. He led by the power of his example, not by the example of his power.

“His legacy is one of service without self-interest, leadership without arrogance, and faith without cynicism.”

He noted that Dozie’s visible achievements, awesome as they were, “pale into insignificance when juxtaposed with the countless lives he transformed; the numerous life stories he changed; the business and political leaders he nurtured; and the spirit of excellence, compassion, and integrity he instilled across generations.”

According to him, earthly sojourn is a testament to the idea that one man, with vision and compassion, can indeed alter the trajectories of countless lives.”

Born in 1939 in Egbu village of Owerri, Imo State, into the family of Catholic catechist, Charles Dozie, the deceased attended Our Lady’s School (Emekuku), Holy Ghost Juniorate Seminary, and Holy Ghost College, all in Owerri, before travelling to London to study Economics at the London School of Economics.

He also attended City University in London for his Master’s in Operational Research and Industrial Engineering.

He began his career as an economist at the National Economic Development Office in the United Kingdom. He was also a part-time lecturer at the North Western Polytechnic, London. Between 1970 and 1971, he served as a consulting economist at the African States Consulting Organisation in Uganda. After leaving his job in Uganda, he relocated to Nigeria at his mother’s instance.

He was subsequently hired by Clement Isong, then Governor of the Central Bank of Nigeria, to conduct studies on the Co-operative and Commerce Bank.

In 1985, he was appointed Chairman of Progress Bank (now defunct). Later that same year, Dozie applied for a banking licence to help traders in South Eastern Nigeria, who were faced with banking problems.

This birthed Diamond Bank, which at inception had a share capital of N10m, with only 21 interested shareholders.

In 1990, he satisfied the requirements of the CBN to operate a standard bank, and in 1991, Diamond Bank began operations, and he was the Chief Executive Officer till 2006.

Although the enabling Law was enacted in 2020, it was not activated, hence the Mbah administration initiated vital amendments to the Law in 2023 and also executed a Deed of Trust to pave the way for the appointment and inauguration of a Board of Trustees (BOT) to bring the Trust Fund into full force.

The 11-member Board of Trustees (BOT) of the Trust Fund is chaired by Mr. Ike Chioke, an Investment Banker and Group Managing Director of Afrinvest Trustees Limited, while Mr. Chinedu Anih was appointed the Executive Secretary.

Other members of the BOT are Mr. Nathaniel Udeh and Mr. Chris Ekemezie representing the private sector; Commissioner for Human Capital and Poverty Eradication, Dr. Malachy Agbo, and Commissioner for Culture and Toursim, Dame Ugochi Madueke, representing the state; and the State Director, Department of State Security, Mrs. Theresa Egbunu and the Garrison Commander, 82 Division, Nigerian Army, Enugu, Brig. Gen. Murtala Abu, representing the security organisations.

Others are ACP (Rtd.) Ifeanyi Nwafor; Igwe Lawrence Agubuzu representing the Chairman of Enugu State Council of Traditional Rulers as well as the Anglican Bishop of Nike Diocese, Bishop Onyeka Onyia and the Vice Chancellor of the Godfrey Okoye University, Rev. Fr. Prof. Christian Aneke, representing the religious institutions.

Mbah, who commended them for accepting to serve the state with their wealth of experience and contacts, put the state’s projected security expenditure for 2024 at N20bn, emphasising, however, that the government was counting on private sector support in regard.

He said:

“The Security Trust Fund is in line with what we have expressed in our manifesto when we were seeking the mandate of our people to serve them. We  promised them that Enugu will be one of the top three states in terms of GDP and of course we said it is going to happen from private sector investment; and attracting private sector investment requires that you have the enabling environment.

“This was why we immediately made certain consequential pronouncements and took emphatic steps in addressing our insecurity challenges. We set up the Distress Response Squad. We are deploying CCTV across our city, and making sure that we have a central Command and Control Centre where we can monitor all that is going on and to prevent crimes.

“We work to prevent crimes, but have also put in place adequate measures and facilities to be able to identify, track, capture and defeat the criminals involved if there is any breach of security of any kind.

“So, the inauguration of this Security Tust Fund today is going to redouble our efforts in the fight against insecurity in the state.”

On his part, Ike Chioke, the BOT Chairman, commended the Mbah administration for containing insecurity in the state, and for activating the Security Trust Fund four years after it was signed into law.

“We are witnessing something that should have happened, perhaps four years ago, when the law establishing the Enugu State Security Trust Fund was actually passed. But without the BOT, it was not possible to action it.

“However, under your leadership, we have seen the amazing work you have done in calming down issues of insecurity in our state. We are witnessing the fact that we can now move around freely on Mondays. But taking further steps of setting up the BOT of the Enugu State Security Trust Fund gives additional impetus to your commitment to make sure Enugu is safe for business and our citizens here”, he stated.

He assured that the appointees would deliver on their mandate, given the calibre of people the government had assembled.

“The objective is first and foremost fundraising. I have my background in financing, financial markets, and capital markets. I have been doing investment banking since 1991. That makes it 33 years of capital raising and with all due modesty with everything I have done in that period, probably over a trillion-naira capital and people with strong credentials we have, I have no doubt that we will meet our people’s expectation.”

Meanwhile, by the provisions of the Enugu State Security Trust Fund Law (as amended in 2023), the Trust Fund has the mandate to source for fund for the acquisition and deployment of security equipment and to carry out other activities of the Fund; act as an intervention agency to all security agencies operating within the State; provide money for the acquisition and deployment of security equipment and such human, material, and financial resources as shall be necessary to prevent crime and preserve public security in the State; promote the efficiency of all security organisations in the State; hold for the benefit of all residents of the State gifts, property, and money; acquire and deploy security equipment and such other resources as shall be necessary for achieving the objectives of the fund; and ensure that every stakeholder joins hand with the government in funding security operations within the State.

The new partnership was established in close collaboration with Afrinvest (West Africa) Limited, a leading capital market holding company in Nigeria active in six principal areas: investment banking, securities trading, asset management, trustee, consulting and financial technology.

This joint effort will make it easier for licensed broker-dealers, asset managers, large commercial banks and other institutional investors from across the continent to invest in Nigeria’s premier exchange via SecondSTAX’s transparent, easy-to-use, cloud-based portal.

Investors will also be able to invest in their native currencies, making a wider range of assets and opportunities available to more Africans and creating an efficient route to increased wealth on the continent.

Nigeria is Africa’s largest economy and its capital markets present some of the most profitable investment opportunities globally. For example, the Lagos bourse ended the year 2020 as World’s Best with a 50% gain, the most since December 2007.

The equity index was also the world leader among the 93 stock indexes tracked by Bloomberg. Some companies listed in the exchange posted a positive return of up to 400 percent. However, the siloed nature of the exchanges in Africa meant that only people based in Nigeria were able to access these opportunities.

SecondSTAX is building technology solutions for investment firms that will power the seamless flow of capital and institutional investment across the continent, and it is consolidating all debt and equity capital markets throughout Africa, making it easier to access opportunities in relevant markets.

The platform facilitates transactions by securely and efficiently routing orders onto existing mature capital markets infrastructure in complete compliance with local regulations.

As a result, African investment firms are empowered to do more for their clients and have the opportunity to earn more for themselves.

The company already has partnerships with the Nairobi Securities Exchange (NSE) and the Ghana Stock Exchange (GSE), driving investment into these exchanges from across the continent.

Along with new investment opportunities into Nigeria’s capital markets, this partnership will also make it easier for institutional investors from Nigeria to invest into other capital markets that are available on the SecondSTAX platform.

Following the NGX launch, access to the service will initially be restricted to Qualified Institutional Investors who are able to place minimum trade orders of USD 10,000.00 (or the equivalent value in NGN). Over time, this limit will be reduced to extend services to other customers.

According to Eugene Tawiah, CEO and co-founder of SecondSTAX, “Our aim is to integrate all the capital markets across Africa to enable more seamless investment flows and this partnership with the Nigerian Exchange Limited represents a major milestone on our journey. Nigeria’s capital markets are full of lucrative opportunities that have until now been out of reach to institutional investors outside the country. At the same time, Nigeria’s institutional investors have largely found it challenging to invest into other capital markets across the continent. This partnership addresses both problems and we are excited to see how investors take advantage of the opportunities that abound across the continent.”

Temi Popoola, CEO, Nigerian Exchange Limited, commends SecondSTAX for its visionary solution to drive institutional investments across Africa.

“This closely aligns with our ongoing efforts to foster innovation and growth in our market through initiatives such as the African Exchanges Linkage Project, which aims to integrate capital markets in the continent; and our partnership with Afreximbank’s Pan African Payments Settlement System (PAPPS) to facilitate seamless cross-border transactions within the African capital markets”, Popoola said.

At NGX, we remain committed to fostering inclusive growth and are open to collaborating with more capital market innovators to stimulate participation and investment in the Nigerian and African capital market. We look forward to the opportunities this partnership with SecondSTAX will unlock and the positive impact it will have on the continent”.

Ike Chioke, Group Managing Director of Afrinvest, said “As a leading capital marketing holding company, we are always at the forefront of driving innovations that grow Nigeria’s capital market. We are delighted to be in partnership with SecondSTAX to enable more opportunities to drive capital inflows into Nigeria’s capital markets and increase investment options for investors in Nigeria.”

Chioke, who spoke at his alma mater, the Federal Government Jos Old Students’ Association 16th National Convention, with the theme ‘Fostering National Unity,’ said “Nigeria’s unity has been called into question.”

On the value of unity, he noted that since Nigeria’s Independence in 1960, successive governments had prioritised promotion of national harmony.

He stated that Unity Schools were established in the aftermath of the Nigerian Civil War by then head of state, Gen. Yakubu Gowon (rtd), as a reconciliatory move to heal a devastated nation and promote harmony among the citizenry; hence, the Federal Government colleges have the Latin motto, Pro Unitate, which means ‘For Unity.’

“Once upon a time, our faith in one Nigeria was unimpeachable, unshakable and unquestionable. In 1952, a Fulani man from Sifawa in Sokoto Caliphate, Mallam Umaru Altine, was elected as the first Mayor of the City of Enugu. Fast forward 70 years and what we see in Nigeria today is a glaring lack of national unity and consciousness, no sense of nationhood, absence of patriotism and open hatred among the people.

“For instance, I, as an Igbo man, who has lived in Lagos for over 12 years, cannot aspire to a public office in Lagos because of my tribe. The same thing goes for a Christian Yoruba man who has lived all his life in the North East. He can never contest for a public office because he is judged first by his tribe, then by his religion, and not at all by his competence,” Ike Chioke said.

He identified cases of non-indigenes being deported from where they live to “states of origin” that they have never visited, emphasising the importance of embracing one another, regardless of tribe or language.

“Are we not all Nigerians?” he queried. “Despite being blessed with enormous natural endowments and human capital, the Nigerian economy is on the brink of collapse, with no clearly defined strategy in place to deal with the effect of domestic and global headwinds. Inflation levels are at a record high, unemployment is getting worse, and the country’s debt keeps piling up.”

He urged the acceptance of Senator Ovie Omo-Agege’s bill, while outlining why Nigerians needed unity more than ever. According to him, such a bill will inspire citizens to share a common vision of Nigeria. In a sense, Nigerians may be attending unity schools and being socialised with similar characters, values and patriotic ideals.

Ike Chioke noted, “About two years ago, ‘A Bill For An Act To Alter The Provisions Of The Constitution Of The Federal Republic Of Nigeria1999 To Define Who Is An Indigene Of The State’ was sponsored by Omo-Agege. The bill seeks to provide for indigeneship by application and the interpretation of the word ‘indigene’ by amending Sections 31 and 318 of the 1999 Constitution, with a view to conferring indigeneship of a state on any resident that has consistently lived in that state for at least 10 years.

“If this bill can be passed into law, it will help us achieve the cohesiveness and integration that we need as a nation. That way, a Hausa man that has lived for the last 15 years of his life in Enugu will not feel alienated and could well have been running for election to the House of Assembly in 2023.”

He added that unless Nigerians took proactive and intentional steps to close the ethnic, religious and political divisions, and pursue inclusivity, national unity would remain elusive in the country.

The report, presented by Mr Victor Ndukauba, Deputy Group Managing Director, Afrinvest West Africa, showed that the banks beat all the prudential guideline limits set by the Central Bank of Nigeria, showing resilience and strength during the year.

Its presentation was made at the launch of the 17th edition of the Nigerian Banking Sector Report and unveiling of Optimus, Afrinvest’s digital investment app, in Lagos on Wednesday night. 

The occasion also marked the announcement of Afrinvest’s new subsidiaries and expansion of its leadership team as well as the unveil of Afrinvest’s refreshed logo(brand identity)

The report’s assessment of CBN’s financial stability indicators showed that Industry Liquidity(Liquidity Ratio) and Non-Performing Loan ratios both improved by 130 basis points(up) and 75bps(down), respectively, to 42.6 per cent and 4.95 per cent. 

Although, the Capital Adequacy Ratio(CAR: 14.1 per cent) underperformed the June 2021 level by 140bps, all the indicators beat the prudential guideline limits of 30 per cent(LR), five per cent(NPLs), and 13.0 per cent(CAR), respectively, despite myriads of challenges in the business environment. 

The report said the improvement is expected to be sustained over the coming years.

It explained that the fiscal challenges presented by weak Federal Government earnings have contributed to the muddling of monetary policy and strong use of Cash Reserve Ratio debits as a subtle strategy, in our view, to compensate for the inflationary effect of ballooned overdraft to the government. 

It insists that in increasing its developmental financing role, especially in agriculture financing, the CBN risks crowding out banks and private sector financing, which is more effective in de-risking the sector and incentivising growth without moral hazards. 

“Importantly, the weak economic growth has robbed banks of the dividend of large and youthful demographics. Over the last 10 years to 2021, real Gross Domestic Product has grown by a compound annual growth rate (CAGR) of 1.9 per cent compared to 2.3 per cent CAGR for the population. 

In line with the decline in income level, poverty has risen to 40.1 per cent based on national standards of annual real per capita expenditure threshold of N137,430.

” For banks, this reality means that upscaling would be less efficient than in an economy where growth exceeds population expansion. Not surprising, Nigeria’s financial depth is weak as is for countries with high fertility rates and a fragile economic base.,” it said 

To turn the tide, the BSR recommended that critical reforms be undertaken as matter of urgency to avoid a repeat of the negative trends seen in the last decade. 

“Some other measures advised include the tapering of fiscal deficit financing – credit to the government – to check money supply expansion, alignment of rates across windows and the adoption of market reflective forex rate via the crawling peg regime. We believe that the outcome for banks in the coming decade would rely on the policy actions taken today to address the issues raised,” it said. 

On exchange rate management, the report said CBN’s strategy (differentiated rates across market segments and capital control) failed the litmus test over the reviewed period, as anticipated in the 2021 report. 

It said the value of the Naira depreciated further by 5.6 per cent and 23.2 per cent to N436.50/$1.00 and N712.00$1.00 (on 19/09/2022) at the NAFEX window and parallel market, respectively. It sated that  near-term improvement in the exchange rate is not in sight, given forex supply constraints due to the self-inflicted injuries in Nigeria’s oil & gas sector (the largest source of FX accretion). 

On the economy, the report said that in 2021, the Nigerian economy recovered markedly from the pandemic-induced strain of the prior year. 

“Real Gross Domestic Product (GDP) grew 3.4 per cent (2020: -1.9 per cent), beating our projection by 0.4ppts. The recovery was mainly driven by the expansion of activities in the non-oil sector (up 4.4 per cent), while the oil sector remained in a recession. This growth momentum was sustained into 2022 albeit with a wider divergence between the oil and non-oil sectors.,” it said.

The report stated that, given the resilient half-year 2022 performance and expectation of sustained positive performance by key non-oil activity sectors in third and fourth quarters of the year,  it reviewed the 2022 baseline growth forecast upward by 40bps to 3.3 per cent. 

However, it maintained that growth momentum in the medium term would remain short of the level that can meaningfully lift the average well-being of the citizenry due to persistent domestic and external headwinds. 

It said oil price level, domestic inflation rate has remained persistently high, averaging 14.3 per cent in the last six years. 

In first half of 2022, headline inflation averaged 16.7 per cent owing to the impact of the Russia- Ukraine war on input prices, continued forex illiquidity, and structural challenges. Based on the World Bank estimate, the stinging fang of the elevated price level would drag five million more Nigerians into extreme poverty (to reach 95.1m) by 2022 year-end. 

The report suggested  that only concerted fiscal and monetary policy efforts targeted at resolving insecurity challenges, optimising exchange rate management, fixing structural loopholes, and curbing reckless fiscal spending would resolve the high inflation quagmire. 

It however, acknowledged that the CBN has taken the lead in the efforts at curtailing the runaway inflation rate as seen in the back-to-back hike of the Monetary Policy Rate in May, July, and September 2022 to 15.5 per cent. 

On the fiscal policy front, it said the divergence between the share of FG’s recurrent (debt & non-debt combined) and capital expenditure component has widened significantly in the last decade. 

“Sadly, economic growth and fiscal stability have suffered the biggest impact from the worsened divergence. Before then, we observed a strong nexus between capital expenditure performance and growth in the decade to 2009. From 1999 to 2009, the divergence between the size of recurrent and capital expenditure averaged 48.5 per cent,” it stated.

It explained that over this period, GDP growth (average: 7.0 per cent) out- paced population growth (2.6 per cent p.a.) significantly. This trend dovetailed into a strong labour market perfor- mance as the unemployment rate eased steadily to about 5.0 per cent by 2009 year-end, according to NBS data. 

Also, GDP per capita surged by 279.9 per cent to $1,891, while fiscal condition ended the decade strong as FG revenue to expenditure ratio printed at 76.5 per cent (2009) with public debt stock (N3.8tn) to GDP ratio of 7.5 per cent. Sadly, this trend has completely reversed over the last decade. 

It explained that between 2010 and 2021, the divergence between the share of recurrent and capital expenditure budgets widened to 74.3 per cent on average. 

“As a result, the share of capital expenditure in the total budget has dropped to an average of 18.9 per cent per annum. When examined from 2015, the divergence is wider at an average of 75.3 per cent, while the average share of capital expenditure in the total budget printed lower at 18.5 per cent This suggests that the economy’s average propensity to consume (represented by recurrent expenditure) has increased by more than 20.0 per cent in the last decade,” the report said. 

In his comments, Ike Chioke, the Group Managing Director, Afrinvest West Africa, said Nigerians should prepare for reforms that would turn the economy around.

He said that looking ahead, Nigeria was set for another cycle of leadership in 2023 as the tenure of President Muhammadu Buhari, 30 state governors, and over 1,000 legislatures draw to a close. 

“At a time when there is daunting fiscal, monetary, and social challenges to surmount, Nigerians cannot afford to elect leaders who lack the competence, capacity, and creativity to find lasting solutions to the national quagmire. Even with a leadership that is willing to introduce the needed reforms, the present challenging environment would worsen before it can get better,” Chioke said.

According to him, regardless of who the President is Nigerians will need to brace for impact. 

“Noteworthy, the political will of the incoming administration to implement tough reforms that would curtail major economic leakages such as the subsidy regime on PMS (which has gulped over N7.0tn since 2010) and ensure the proper channelling of scarce resources to critical sectors would be a refreshing start,” he added.