LAGOS — Former Governor of the Central Bank of Nigeria (CBN) and the 16th Emir of Kano, Muhammadu Sanusi II, has disclosed that he deliberately slowed down the entry of telecommunications companies into Nigeria’s financial services sector during his tenure at the apex bank to prevent systemic risks and safeguard local banking institutions.
Speaking during a keynote presentation at a financial technology leadership summit in Lagos, Sanusi clarified that the policy delay was a calculated strategy to ensure traditional banks built robust digital infrastructure and retained capital control before mobile network operators (MNOs) were granted payment service bank (PSB) licences.
Sanusi explained that while telcos possessed massive subscriber bases capable of immediate market dominance, allowing them unregulated entry at the time would have weakened the domestic banking sector, compromised regulatory oversight, and transferred core monetary system control into foreign-owned telecommunications conglomerates.
Core Reasons Behind the Strategic Delay
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Protecting Domestic Capital: Sanusi stressed that early entry by telcos would have siphoned float deposits away from commercial banks, severely restricting the banking sector’s ability to create credit and finance long-term infrastructure.
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Leveling the Digital Playing Field: The policy delay forced Nigerian banks to innovate and invest heavily in electronic banking, mobile apps, and USSD channels, ultimately creating the foundation for Nigeria’s modern fintech ecosystem.
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Regulatory Oversight Constraints: The former CBN chief noted that telecommunications operators were regulated by the Nigerian Communications Commission (NCC), creating jurisdictional ambiguities over financial consumer protection, anti-money laundering (AML) enforcement, and reserve requirements that needed resolution prior to licensing.
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Transition to Payment Service Banks: Following the eventual creation of the Payment Service Bank (PSB) framework years later, telcos entered a mature, highly competitive landscape where traditional banks and fintechs had already established deep digital footprints.
