Facilitating Financial Literacy, Consumer Protection

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Financial literacy and consumer protection are two key policies initiatives which has remained central to the mandate of the Central Bank of Nigeria, writes Ugo Aliogo

The desire to drive financial literacy and consumer protection have remained central in the mandate of the Central Bank of Nigeria (CBN), as it strives to promote a sound financial system in the country.

According to a report by the CBN, a key aspect of this function is the entrenchment of effective consumer protection regimes that not only protects the rights of consumers, but also engenders public confidence in the financial system.

The report explained that 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.

It pointed out that a high percentage of the population does not have the requisite skills to effectively manage 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 had in 2011, in its “MAYA Declaration,” committed to reducing the number of financially excluded Nigerians from 46.3 percent in 2010 to 20 percent 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.

The issues of financial literacy and consumer protection were again brought to the front burner of discourse at the launch of the Consumer Awareness and Financial Enlightenment Initiative (CAFEi) in Lagos recently.

Speaking at the event the President, CAFEi, Mrs. Debola Osibogun, said the initiative was a non-profit organisation dedicated to driving financial literacy and consumer awareness in Nigeria.

She explained that since commencement, CAFEi have had extensive consultation with public and private institutions, religious institutions, profit and non-profit organisation as well as regulators charged with oversight responsibilities across the financial services industry.
Osibogun, said her organisation had engaged the CBN through the department of consumer protection to advocate for the elevation of consumer literacy in its agenda.

She added that organisation have had extensive engagement with the Nigerian education research development council to advocate for the inclusion of financial literacy in the curriculum for secondary schools in the country.

The CAFEi President maintained that the organisation have been at the forefront of driving the conversation at the national level for increased consumer education and awareness, stating that it has had series of publications in newspapers to mark World Savings Day, International Women’s Day and the Global Money Week, “media tours were made to numerous radio stations in our campaign to ensure consumers in Nigeria are aware of their rights in their relationships with providers of products and services.”

According to Osibogun, “We also continued to maintain presence in the social media space to drive this agenda that has remained sacred to this NGO. As elites, we carry a huge moral burden to ensure that we safe guide the interest of every Nigerian and remain strong advocates for a society where the rights of consumers of services and products are protected. The societal obligation we owe to one another is captured in the words of Rev. Dr. Martin Luther King and I quote ‘Injustice anywhere is a threat to justice everywhere.’

“The mutual trust between providers and consumers of goods and services is an important ingredient in the functioning of any society and we all share in the obligation to uphold this relationship.

“As a nation, we have survived failure of several sectors in the past; however, we stand no chance of any meaningful progress in a failed system where this relationship is not respected. Therefore, it behooves on us to ensure the providers of these services continue to enjoy the trust of consumer and vice versa.

“Finding the right balance between the increasing expectations of consumers and the interests of the service providers remains paramount as we continue to strive for a society that is worth bequeathing onto the next generation of Nigerians.”

She added: “In many countries around the world and very recently in Nigeria, we have seen significant expansion of innovation in products, services and technology to deepen the reach of financial services, including new economic activities and previously excluded segments such as small businesses and communities in the lower income classes.

“These innovations have also supported improved efficiencies in the cost and delivery of financial services to the public. However, there are two sides to a coin.

“As part of the effort of CAFEi to finding a workable solution to these challenges, we interacted with a wide range of stakeholders and from our experience, one fact stands out – individuals, organisations and regulators are genuinely concerned about forging inclusive progress and sustainable shared prosperity.

“Without exceptions, all these stakeholders seek solutions that address the challenges of consumer protection in a manner that protects both the suppliers of these services and products as well as its consumers.

“The solutions we are looking for will lay both in empowering consumers to make more informed decisions, and in strengthening the market conduct practices of institutions through effective regulation and enforcement.

“I am positive that you will all agree with me that one without the other is wholly inadequate. The launch of CAFEi coincides with the period when global attention is turning towards developments in financial inclusion and consumer protection.

“The need for stronger international cooperation on consumer protection has already been acknowledged by the G20 leaders who called on regulators to examine options to advance consumer protection through informed choice that includes disclosure, transparency and education; as well as protection from fraud and abuse.

“This development reflects the increasingly global dimension of services, in which weak consumer protection can have repercussions that extend beyond national borders. With countries at differing stages in the implementation of market conduct and consumer education frameworks, there is enormous potential to learn from each other, thereby build capacity more quickly and evenly to implement better frameworks in every country. “

Continuing, she said: “It was therefore a welcome development when President, Muhammadu Buhari passed the Federal Competition and Consumer Protection Act (FCCP) into law despite series of attempts by previous governments to establish a law that provides protection for Nigerian consumers.

“This new Law which came into effect on February 6 has moved the conversation on protecting Nigerian consumers from mere rhetoric to enforceable law through the establishment of the FCCP Tribunal to drive compliance with the regulation. By this token, Nigeria has joined the league nation’s leading the change in protection of consumers.

“We appreciate the opportunity to be a part of this important history-making initiative, and we value the close collaboration that has been built with the various regulators, agencies and other bodies who continue to remain our valued-allies in this battle to ensure no single Nigerian is left behind in this journey for a prosperous nation.

“I do hope that ultimately, and with the help of all in this room, we would find that middle ground, big enough to accommodate all stakeholders including the teeming consuming public in pursuit of their various aspirations.

“At national level, after the failed attempt at producing a regulation that protects consumer in Nigeria by the Bureau of Public Enterprise (BPE) in 2003, there have been several attempts and collaborative efforts among public institutions, government agencies, trade unions and other pressure groups to bring Nigeria into the folds of countries with quality laws that ensure the interest of the public is protected from abuses.

“With the signing of the FCCP ACT into law in February 2019, by President Muhammadu Buhari, law would ensure completion in all sectors of the economy; thereby allowing consumers access to option and strengthens the competitive landscape that ultimately ensures prices reflect economic value delivered to consumers through interaction of the market forces.”

Also speaking at the event, a member of the advisory board, Mrs. Mojisola Bakare, noted that the organisation was set to empower people, adding that when people know what their rights are they would be in a better position to fight for it.

Regarding the organisation’s pose to empower people with entrepreneurial capability, Bakare explained that the organisation would empower entrepreneurs with information on financial literacy, “so we are able to do a lot of things in the financial inclusion world which will help a lot of people in their business.”

She added: “One of the objectives of the annual symposium, we will be having is that we will be training people in terms of financial education. We will expose them to a lot of opportunities that open for them financially. We are working with all the banks to be able to collaborate. In fact, the facility will come from the banks, so that people will know what opportunities that are open to them.

“We will educate them and handhold them to make use of these opportunities. Without the right education and knowledge, a lot of entrepreneurs don’t know where to go.

“We will help to bring the help to those who need it and of course the entrepreneurs will be aware of their rights as well. The scope of the training is that it is going to be country wide in order for us to have more impacts. We will be zoning it to other regions to have it the training, but the first will be in Lagos. For the financial inclusion aspect of what we are doing, we will be working with the CBN and all the commercial banks, and other institutions, we will partner with them to get a lot of information.”