CBN: Empowering Nigerian Youths with Financial Literacy, by Abdulrahman Abdulraheem
With a population estimated to be in excess of 220 million, Nigeria is the most populous country in Africa and seventh in the world. The country’s population keeps growing at about 2.6 percent per year, one of the fastest rates globally. At this rate, Nigeria’s population could double within the next 25 to 30 years.
The population structure is potentially an economic asset. The country has the largest population of youth in the world, with a median age of 18.1 years. About 70% of the population are under 30, and 42% are under the age of 15. The overall quality of life for the population is however of concern to many. Poverty and youth unemployment have been a major source of worry for policy makers and other stakeholders for decades now.
It is not all these problems, however, that have something to do with the failure of government or the lack of opportunities. It is obvious that a lot of the issues are personal or individual in nature. Some Nigerians have had missed chances, opportunities that they misused or didn’t take full advantage of.
In their formative stages, some Nigerians had education but not the right mix of formal and informal education or not quality or qualitative education. Some had exposure but not the right kind of exposure. Most Nigerian educational institutions also lack conducive environment for proper mentorship, guidance and counselling. Our educational curricular has also not emphasised vocational skills, entrepreneurship, economic independence and financial literacy enough. That is why the youths of these days believe all they have to do is get a university degree by hook or crook and begin to feel entitled to the good life even though some of them have had opportunities to save, invest, buy shares or become entrepreneurs at one stage of their life or the other.
Financial Literacy, Inclusion and the CBN
An important mandate of the Central Bank of Nigeria (CBN) is the promotion of a sound financial system in Nigeria. A key aspect of this function is the entrenchment of effective consumer protection regime that not only protect the rights of consumers but also engender public confidence in the financial system.
The current realities in the Financial Sector show that, it is only when the interest of consumers is given proper attention and protected that public confidence would be restored in promoting a strong and stable economy. Though, there exist many educated and literate Nigerians, a high percentage of the population does not have the requisite skills to effectively manage their financial transactions and take advantage of the opportunities presented by the financial products and services to improve their well-being.
Consumers of Financial Services have also been subjected to unethical practices from financial institutions which could be attributed to their low levels of financial literacy arising from their lack of knowledge of their rights and obligations in their relationships with the financial institutions.
The CBN made a commitment in 2011 referred to as the “MAYA DECLARATION”, to reduce the number of financially excluded Nigerians from 46.3% in 2010 to 20% by the year 2020. To ensure the fulfilment of this obligation, a National Financial Inclusion Strategy was accordingly developed and launched in October 23, 2012.
The strategy identified consumer protection and its constituent pillars of Market Conduct, Dispute Resolution and Consumer Education as critical to the attainment of its objectives.
An essential pillar of any consumer protection programmes is Consumer Education through ‘financial literacy’, defined as “the possession of knowledge and skills by individuals to manage financial resources effectively to enhance their economic well-being.”
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It is only when the vast majority of the Nigerian population is financially literate that they can participate in the formal financial system, by becoming aware of and taking advantage of its opportunities, get financially included and thereby contribute to the financial and economic development of Nigeria.
As a key implementation priority of the Financial Inclusion Strategy, the CBN developed a Financial Literacy Framework (FLF) in January, 2013. The document articulates a strategic direction for a multi stakeholder approach to the delivery of financial education programmes across various target groups of the population in Nigeria.
In the course of the implementation of the FLF, the Consumer Protection Department embarked on several consumer education activities aimed at improving the financial literacy levels of consumers of financial services.
In order to reach members of the organised private and public sector as well as the general public and grassroots, the Consumer Protection Department covered 12 States across the 6 geo-political zones namely; Ogun, Rivers, Kano, Plateau, Gombe, Imo, Niger, Bauchi, Sokoto, Cross River, Oyo and Enugu, where it conducted a 2-day mass sensitisation workshop and media awareness campaigns.
In collaboration with the members of the Bankers’ Committee, the CBN, with the sole aim of inculcating the right financial habits and skills in children that would make them take the right decision that will enhance their financial well-being, has facilitated at School Mentoring/Reach-out Programmes such as commemoration of the annual “Global Money Week” which started in 2013 and the commemoration of the annual “World Savings Day,” to teach students various financial literacy topics like importance of saving, investing/growing your money, etc.
CBN and Global Money Week
The GMW campaign started in 2012 and has reached over 60 million children in 176 countries. This year’s theme “Protect your money, Secure your future” is the 12th edition and speaks to the importance of distinguishing between needs and wants, money management, fraud and scam, and investing to enable young people have financially secure future.
As part of this year’s celebrations, children in secondary schools from the six geopolitical zones, the FCT and Lagos participated in a trip to the Nigerian Exchange Group, Lagos, the CBN’s currency museum, Abuja, attended the Financial Literacy Fair at the CBN Head Office Abuja, and the School Mentoring Programme across the 6 geopolitical zones, Lagos and Abuja.
As the Apex financial services regulatory authority and the coordinating organisation for the event, CBN collaborated with the Bankers’ Committee, Sub-Committee on Financial Literacy and Public Enlightenment (FLPE) as well as numerous stakeholders to ensure the success of the GMW celebrations in Nigeria.
The children were educated on the evolution of money, needs and wants, money management, frauds and scams, the importance of investing, how to open an account and the importance of planning, i.e. budgeting in order to secure their future.
The theme for this year’s week-long event captured the importance of learning, from an early age, to always think about the future when making financial decisions and plan accordingly. It emphasises the importance of not only making money, but understanding frauds and scams, saving, and investing for the future. Being equipped with such skills at this young age will enable them achieve financial independence and a financially secure future.
Last Line
The GMW is a great opportunity for the CBN to contribute significantly to the mental development of Nigerian youths, to make them useful to themselves, their families and the nation at large. CBN governor, Olayemi Cardoso, has also done well to sustain this brilliant initiative which started in 2013, as part of measures to advance financial inclusion through financial literacy.
Abdulrahman Abdulraheem is the author of “eNaira Revolution: A Peep into Nigeria’s Cashless Future”
