Banks close branches, ATMs, fall short of SDG target
By Jeph Ajobaju, Chief Copy Editor
A total 234 branches and 649 Automated Teller Machines (ATMs) where closed in Nigeria in 2020 which reduced the country’s Financial Access Score (FAS) to 4.44 from 4.78 in 2019, according to the International Monetary Fund (IMF).
The report was released on Monday, the same day the Fiscal Responsibility Commission (FRC) warned banks not to violate the Fiscal Responsibility Act (FRA) by giving reckless loans to state governments.
The IMF disclosed in its Financial Access Survey 2021 Trends and Developments report that Nigeria fell short of the two FAS indicators used to monitor Target 8.10 of the 2030 Sustainable Development Goals (SDGs).
The SDG target aims to strengthen domestic financial institutions to expand access to banking and financial services.
The FAS indicators are Number of Commercial Bank Branches per 100,000 Adults and Number of ATMs per 100,000 Adults.
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Nigeria recorded declines in these two critical indicators and 12 other indicators among the 64 indicators measured by FAS because of the decline in the number of commercial bank branches to 5,158 in 2020 from 5,392 in 2019, the IMF said.
The Number of Commercial Bank Branches per 1,000 km2 in Nigeria fell to 5.94 in 2020 from 5.68 in 2019, per reporting by Vanguard.
In terms of Number of ATMs per 100,000 Adults, the country’s FAS fell to 17.19 in 2020 from 16.14 in 2020 due to a reduction in the number of ATMs by 649 to 18,810 in 2020 from 19,459 in 2019.
Also, the Number of ATMs per 1,000 km2 in Nigeria fell to 20.65 in 2020 from 21.36 in 2019.
The report also showed an 11 per cent decline in the number of registered mobile money agent outlets in Nigeria to 129,154 in 2020 from 145,800 in 2019.
FRC warns banks over lending to states
FRC Chairman Victor Muruako warned banks at a Fiscal Transparency and Accountability Sensitisation in Lagos not to make themselves willing tools of fiscal recklessness in the hands of state governments, according to Vanguard.
“We wish to use this opportunity to discourage the bad habit of some sub-national governments to make loans their first and last consideration for meeting revenue shortfalls rather than considering ways of harvesting their dormant potentials for Internally Generated Revenue [IGR].
“As for banks and other financial institutions that make themselves willing tools of fiscal carelessness by granting loans to some sub-national governments without regard to due process, the Commission hereby reminds them that Section 45(2) in Part X of the Fiscal Responsibility Act 2007, which specifies conditions for borrowing by any government in the Federation or its agencies and corporations, reads as follows: ‘Lending by banks and financial institutions in contravention of this Part shall be unlawful.’
“In line with the foregoing, the Commission hereby serves notice to defaulting banks and other financial institutions that the window of just using moral suasion is closing.
“Going forward, we intend to invoke the provisions of the law against this expressly defined unlawful act, wherever it rears its head.
“Where FRA 2007 appears inadequate to compel, we shall aggressively invoke our collaborations with sister agencies such as the Independent Corrupt Practices Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC).”
Muruako said the FRC had expected “bailout loans” to increase the number of states that would enact fiscal responsibility laws and establish independent fiscal responsibility agencies that would monitor and enforce the laws.
