The new governor of the Central Bank of Nigeria (CBN), Lamido Sanusi, has indicated that the CBN is prepared to lift the ban on foreign ownership of Nigerian banks, saying that this could allow fresh capital and risk management expertise into the sector. Currently, the CBN must approve any acquisition of 5% or more of a Nigerian bank by a foreign firm.

Mr Sanusi said that the previous governor had also imposed a rule that no foreign bank could own more than 10% of a Nigerian one, but that this was “unnecessary” and should change. “The central bank does need to approve any takeover more than 5 percent, so frankly it is unnecessary to have a 10 percent restriction,” he said on the sidelines of a summit of leaders from regional economic bloc ECOWAS.

Earlier, in an interview with the Financial Times he said that Nigeria wanted to “try to encourage the foreign banks that are coming, not just with money, but with management and systems, to come in and acquire”. He said he had no timeframe for altering the rules but said they were unnecessarily restrictive.

Analysts say that could weed out some weaker banks and prompt a second round of consolidation. “It is not something we would rule out. If they want to do it through mergers and acquisitions, voluntary and market-driven, it is something we would encourage,” Sanusi said. He was quoted by the Financial Times as saying he envisaged Nigeria ending up with around 15 banks, down from 24 now.

Nigeria, Africa’s second biggest economy and its most populous nation, is home to some of the continent’s biggest banks. The Nigerian banking industry is currently dominated by local banks. Currrently, the only foreign banks with substiantial operations in Nigeria are Standard Bank and Citigroup. With a population of 140 million people, Nigeria has long been seen as a huge potential market for retail banking and as a strategic base from which to launch regional operations.

Prior to being confirmed by the Nigerian Senate, as CBN governor in June 2009, Mr. Lamido Sanusi was Managing Director and Chief Executive Officer of First Bank Nigeria.

Prior to his appointment as First Bank’s CEO, Mr. Sanusi Lamido was Executive Director, Risk & Management Control of FirstBank, where he championed remarkable developments in the Bank’s enterprise, risk, and management control mechanisms. He was General Manager at United Bank for Africa, PLC (UBA), where he anchored the transformation of the previous Credit Risk Management Division into an Enterprise-Risk Management sector and spearheaded UBA’s Basel 2 focus by establishing the framework, policies, processes, and systems necessary for compliance with the guidelines of the New Capital accord.

Sanusi graduated with a B.Sc in Economics from Ahmadu Bello University (ABU), Zaria in 1981 and was later in the M.Sc class and started his working career in academics, teaching undergraduate Economics (1983-1985) at the Ahmadu Bello University. He then proceeded to a banking career, first with ICON Limited (Merchant Bankers), where in a period of about seven years he gained wide experience in Issuing House activities, Financial Advisory Services, Pivatisation, Debt-Conversion and Credit and Marketing, before joining UBA.