Tony Elumelu, Chairman of United Bank for Africa (UBA), has identified regulatory and compliance costs as major challenges facing the banking sector.
Elumelu made this observation while speaking at the Chartered Institute of Bankers of Nigeria (CIBN) 17th annual banking and finance conference held in Abuja on Tuesday.
The Nigerian businessman noted that the banking sector provides crucial financial support to the country, but its ability to contribute to Nigeria’s economic growth is being hindered by various 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.”
He, therefore, said by working together, a more resilient 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 July 17, Tinubu asked the national assembly to amend the 2023 Finance Act to impose a one-time windfall tax on banks’ foreign exchange (FX) gains.
However, the national assembly increased the windfall tax on banks’ FX gains to 70 percent, from the proposed 50 percent, in the amended Finance Act 2024.
The decision had raised concerns among professionals in the financial industry.
However, Elumelu said he supports the implementation of the windfall tax on banks’ FX gains.
