Calls for strategic assessment of Nigeria’s potential entry into global central banking network
The Executive Director of the Foundation for Peace Professionals (PeacePro) and Multidimensional Energy Economics professional, Abdulrazaq Hamzat, has called on the Central Bank of Nigeria (CBN) to urgently examine Nigeria’s potential acquisition of shareholding membership in the Bank for International Settlements (BIS), saying the move could generate up to $20 billion in cumulative economic value for Nigeria over 10 years.
Hamzat, who initiated the proposal as part of PeacePro’s advocacy for stronger economic and financial institutions in Nigeria, said the estimated value could arise from improved reserve management, foreign exchange risk management, financial sector resilience, monetary policy capacity and greater institutional influence.
He clarified that the $20 billion is not money that would be paid directly to Nigeria by the BIS, but an estimate of the potential economic value that could result from better management of Nigeria’s financial assets and monetary system.
“The BIS will not give Nigeria $20 billion. That is not the argument. The argument is that Nigeria could potentially create up to $20 billion in economic value over a decade by improving the way we manage the assets, currency and financial system we already have,” Hamzat said.
The BIS is owned by 63 central banks and monetary authorities whose economies collectively account for about 95 percent of global GDP. Its shareholder members have voting and representation rights at General Meetings.
Hamzat argued that Nigeria should evaluate BIS shareholding beyond the immediate cost of acquiring shares or the dividends that may accrue.
“If we reduce BIS membership to the question of dividend, we have completely missed the point. The real value is institutional. It is about what happens to Nigeria’s reserves, currency and financial system when our central bank is more deeply integrated into the world’s leading network of central banks.”
Hamzat identified reserve management as one of the most immediate areas where Nigeria could derive economic value.
He said even marginal improvements in risk-adjusted returns, liquidity management and asset allocation could produce significant savings and additional value when applied to Nigeria’s large external reserves.
“When you are managing tens of billions of dollars in reserves, a small improvement in risk-adjusted returns, liquidity management or asset allocation can be worth hundreds of millions of dollars.”
He stressed that the objective should remain the traditional reserve-management priorities of safety, liquidity and return, rather than excessive risk-taking in pursuit of higher returns.
Hamzat also identified foreign exchange management as a major area of potential benefit, given Nigeria’s exposure to global interest rates, commodity prices, capital flows and movements in the dollar.
“The naira does not operate in isolation. Every major movement in the dollar, oil prices, US interest rates or international capital flows eventually affects Nigeria. We need a central bank that is institutionally equipped to anticipate and manage those shocks.”
According to Hamzat, deeper engagement with the BIS could also strengthen Nigeria’s financial-sector resilience.
The BIS supports major global financial standard-setting mechanisms, including the Basel Committee on Banking Supervision.
“The cheapest financial crisis is the one prevented. When a banking or currency crisis occurs, the losses spread to businesses, households, government revenue, employment, investment and economic growth.”
He said improved financial stability monitoring, risk management and crisis preparedness could therefore generate significant economic value even without producing direct government revenue.
Hamzat also linked stronger central-bank capacity to monetary policy and economic planning.
“Monetary policy is not just about interest rates. It affects investment, credit, production, employment, exchange rates and ultimately government revenue. Anything that improves the quality of monetary policy decisions can have an economy wide effect.”
He said Nigeria could benefit from deeper exposure to international central bank cooperation on inflation, financial stability, capital flows, payment systems and digital finance.
He also pointed to the BIS’s growing work on the future of cross-border payments, including Project Agorá, which is examining the use of tokenised central-bank reserves and commercial-bank deposits in wholesale cross-border transactions.
Hamzat stressed that the $20 billion estimate should be subjected to rigorous and independent economic modelling before being treated as a policy projection.
“If the independent assessment produces $20 billion, excellent. If it produces $10 billion, it is still potentially a compelling investment. If it produces $5 billion, the question remains whether the strategic benefits justify the cost. What Nigeria cannot afford to do is dismiss the opportunity without studying it.”
He proposed the establishment of a CBN-led Nigeria-BIS Strategic Assessment Team comprising experts in monetary economics, international finance, reserve management, banking regulation, foreign exchange markets, financial technology and economic planning.
The team, he said, should assess the cost of membership against potential gains in reserve management, financial stability, monetary policy, FX management, institutional influence and regional financial integration.
Hamzat said Nigeria’s potential BIS membership could also have implications for the wider West African region.
Although the BIS has 63 shareholder central banks and monetary authorities, no West African central bank is currently among its shareholders. African shareholder members include Algeria, Morocco and South Africa.
“West Africa has hundreds of millions of people and a major regional economy, yet the region has no shareholder seat at the BIS. That should concern us.”
He urged the CBN to engage regional institutions, including BCEAO, WAMA, WAMI and WAIFEM, in exploring how Nigeria’s potential membership could strengthen West African representation in global monetary governance.
“We should not only be the biggest economy in West Africa; we should also be one of the countries shaping the financial architecture of the region.”
Hamzat said Nigeria’s economic size and systemic importance provide an opportunity to translate economic weight into greater institutional influence.
“Nigeria cannot continue complaining about the rules of global finance while remaining absent from important rooms where the future of global finance is discussed.”
He said developments in digital finance, tokenisation, cross-border payments and emerging systemic risks make stronger international central bank cooperation increasingly important.
“The world is moving rapidly towards a new monetary and financial architecture. Nigeria cannot afford to watch these developments from the gallery.”
Hamzat urged CBN Governor Olayemi Cardoso to initiate formal consultations with the BIS and commission a comprehensive cost-benefit assessment of potential Nigerian shareholding.
He said the findings should be presented to the Federal Government and other relevant economic-policy institutions.
“Economic stability is built before a crisis, not during one. Nigeria should invest in the institutions that help us anticipate shocks, manage them and recover faster.”
Hamzat concluded that the proposal deserves serious consideration as part of a broader strategy to strengthen Nigeria’s monetary institutions and increase its influence in global financial governance.
“The $20 billion is a proposition that deserves to be tested, not dismissed. Nigeria needs stronger monetary institutions. West Africa needs a voice. And the CBN should seriously consider whether BIS shareholding can become part of the strategy for building a more stable, resilient and globally competitive Nigerian economy.”