In order to avoid being negatively affected by the on-going global financial crisis, a Deputy-Director of the Central Bank of Nigeria, Mr. Onyebuchi Ibedu, has called on Nigerian banks and other financial institutions to exhibit professionalism in the management of the risks involved in their daily operations.
Ibedu said if the nation’s financial institutions could come out with a blue print on risk management, the rampaging global financial meltdown would be curtailed drastically and the impact would not be severe on the nation’s economy.
Ibedu, who stated this on Friday in Lagos during the Risk Management Association of Nigeria’s annual president’s dinner, explained that the financial meltdown, no matter the plan to avoid it, would have its impact on the Nigerian economy.
According to him, “The impact is here with the oil prices falling from almost $150 per barrel to a sum less than $44 per barrel within a short period of time.
“ Nigeria ’s economy can not be insulated from the rest of the world. Moreover, we are a one commodity country, so the impact is real and is being felt already, with falling oil prices and crashing stocks.”
He pointed out that 2009 and beyond might be worse because of the impact of the meltdown, adding that “growth rate will go down, things will be tighter, but the CBN is making frantic efforts to ensure that the country’s economy is not affected to the extent of a recession.”
According to him, the western economies are experiencing the meltdown, due to the failure of regulators to handle the issue with all seriousness.
Ibedu said for effective management of risk in the nation’s financial institutions, all hands must be on deck to avoid unforeseen situation.
He challenged risk managers to double their efforts, stressing that there was a need to leverage on the errors of the developed economies in building the Nigerian economy.
Executive Director, Risk Management, Equitorial Trust Bank Limited, Mr. Sridhar Kalyanasundaram, explained that different types of risks impacted on a bank’s operational continuity.
According to him, risks such as physical issues (people, premises and peripheral issues); as well as technical issues (liquidity, reputation, legal/regulatory issues); infringe seriously on the workability of any organisation.
He, however, said there was the need for business continuity management, stressing that it was a holistic management process that identified potential threats to an organisation and its impact on business operations.
This, he noted, provided a framework for building organisational resilience with the capability for an effective response.
He called for better policy implementation in the areas of risk management that could have a lasting positive effect on the nation’s economy.
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