Sanusi: Admits Blocking Telcos Banking Nigeria Was Error

• Former CBN Governor Muhammadu Sanusi II admitted his decision to delay telecommunications companies from entering Nigeria's financial services sector was a mistake.
• His initial opposition, during his 2009-2014 tenure, stemmed from concerns about depositor fund safety after a banking crisis.
• Sanusi now believes this policy slowed Nigeria's financial inclusion drive, acknowledging telcos' importance in reaching underserved populations.
• The 2026 Access to Financial Services in Nigeria Survey shows overall financial inclusion at 79%, with formal inclusion rising to 73% from 64% in 2023.
• He cautioned that increased access to financial tools does not equate to improved income or economic welfare, advocating for services linked to productive real economy activities.

This historical admission by a former CBN governor provides crucial context for the evolution of financial services regulation in Nigeria.

Former Central Bank of Nigeria (CBN) Governor and current Emir of Kano, Muhammadu Sanusi II, has openly acknowledged that his past decision to impede the entry of telecommunications companies into Nigeria's financial services sector was an error. This admission, made during his tenure as CBN governor between 2009 and 2014, significantly slowed the nation's progress toward greater financial inclusion. Sanusi's initial opposition stemmed from profound concerns regarding the security of depositors' funds, particularly in the aftermath of a banking crisis that had recently impacted the country.

Speaking at a fireside chat during the official launch of the Access to Financial Services in Nigeria 2026 Survey Report in Abuja, Sanusi reflected on his time at the apex bank. He explicitly stated his responsibility for delaying the integration of telcos into the financial landscape. While his intentions were rooted in protecting the financial system, he now views this as a Sanusi wrong telcos banking policy that hindered development. The discussion was moderated by Professor Olayinka David-West, Dean of Lagos Business School.

He explained that the regulatory environment immediately following the banking crisis made him hesitant to grant companies not under the primary oversight of the CBN access to substantial financial resources. However, subsequent advancements have underscored the critical role that telecommunications and technology firms play in extending vital financial services to Nigeria's underserved populations. This historical admission by a former CBN governor provides crucial context for the evolution of financial services regulation in Nigeria.

During his leadership of the CBN, Muhammadu Sanusi II faced a challenging regulatory landscape, marked by the imperative to safeguard the financial system. His reluctance to allow Muhammadu Sanusi II telcos financial services integration was a direct consequence of these concerns, as he expressed discomfort with entities outside the CBN's direct regulatory purview managing large pools of public funds. This stance led him to resist significant pressure from various institutions, including the World Bank, and other stakeholders who advocated for a more rapid opening of the financial services space to telecommunications providers.

Sanusi now concedes that had he permitted earlier entry, Nigeria would have achieved considerably more progress in integrating millions of unbanked citizens into the formal financial system. This CBN governor financial inclusion mistake highlights a pivotal moment in Nigeria fintech policy evolution. The former governor's current perspective emphasizes that the expansion of technology-driven financial services in recent years has vividly demonstrated the limitations of relying predominantly on traditional banks to deepen financial inclusion, noting their inherent lack of widespread physical presence or "footprint" across the country.

The implications of such policy decisions are evident in recent data. The 2026 Access to Financial Services in Nigeria Survey Report indicates continued improvements in the nation's financial inclusion metrics. Overall financial inclusion reached 79% by 2026, with the population of financially excluded individuals decreasing to 21%. Formal financial inclusion also saw a notable rise, climbing to 73% from 64% recorded in 2023. Despite these gains, the survey also highlighted persistent disparities across different income groups, genders, and geographical regions.

Sanusi observed that the drive for financial inclusion has maintained momentum across successive administrations and economic policy shifts. However, he issued a crucial caveat: expanding access to bank accounts and digital payment systems should not be conflated with genuine improvements in income levels or overall economic welfare. He articulated that merely "opening an account, moving money, is not the same as earning money" or addressing poverty. Instead, he argued that financial services must be more intrinsically linked to productive economic activities within the real economy, such as agriculture, manufacturing, and trade, to foster meaningful development.

This historical admission by a former CBN governor provides crucial context for the evolution of financial services regulation in Nigeria, particularly regarding the role of fintech and telecommunications companies. Lawyers advising clients in these sectors can leverage this understanding of past policy missteps to anticipate future regulatory openness and advocate for innovation-friendly frameworks that align with the current drive for financial inclusion.

Source: Original reporting via ICIR