Sanusi's CBN Regret: Delaying Telco Entry Into Finance Cost Nigeria Dearly
Muhammadu Sanusi II, former Central Bank governor and current Emir of Kano, has acknowledged that restricting telecommunications companies from financial services during his tenure represented a significant policy misstep. The admission, made at the 2026 Access to Financial Services survey launch, underscores missed opportunities for financial inclusion in Africa's largest economy.
Muhammadu Sanusi II has publicly regretted preventing telecommunications firms from entering Nigeria's financial services sector during his tenure as Central Bank governor, acknowledging the decision constrained financial inclusion in the nation.
Speaking Wednesday at the launch of the 2026 Access to Financial Services in Nigeria survey, Sanusi expressed candid reflection on a policy that shaped the regulatory landscape for over a decade. The admission carries substantial weight given his influential position in shaping monetary and financial sector policy from 2011 to 2014. Telcos possess unparalleled distribution networks spanning rural and urban Nigeria, reaching populations that traditional banks struggle to service effectively.
The restriction proved consequential for financial deepening. When Sanusi served as CBN governor, Nigeria's mobile subscriber base exceeded 100 million, yet regulatory barriers prevented telcos from leveraging their customer reach into deposit-taking, credit provision, and insurance services. This regulatory conservatism reflected legitimate supervisory concerns about capital adequacy and consumer protection, but it ultimately sacrificed financial inclusion gains available through alternative channels. Today, only a fraction of Nigeria's 220 million population maintains formal bank accounts, with rural communities particularly underserved by traditional banking infrastructure.
The policy reversal gained momentum under subsequent administrations. By 2021, the CBN began licensing telecommunications companies as Payment Service Banks, permitting limited financial operations. These institutions now facilitate money transfers, bill payments, and savings products across Nigeria's vast mobile network. MTN Nigeria, Airtel, and Globacom have since expanded financial service offerings, though restrictions remain tighter than full banking licenses would permit. Had Sanusi's CBN embraced telco participation earlier, Nigeria's financial inclusion metrics would likely reflect substantially higher penetration rates, particularly in underbanked northern and rural regions.
The naira's depreciation and persistent inflation have heightened financial access deficits. Ordinary Nigerians increasingly rely on informal money transfer mechanisms and cash transactions, limiting their exposure to formal credit systems and investment products. Expanded telco involvement in finance could have created competitive pressure on traditional banks, potentially driving down transaction costs and service fees that burden low-income earners. The regulatory delay also prevented early development of digital payment infrastructure that might have reduced the Central Bank's subsequent heavy reliance on cashless policy initiatives.
Sanusi's acknowledgment reflects broader recognition that Nigeria's financial inclusion challenge demands unconventional solutions. The 2026 A2F survey launch represents renewed focus on closing persistent access gaps affecting approximately 35 million unbanked adults. Telecommunications companies remain positioned as critical delivery mechanisms for reaching these populations, given their existing relationships with customers and established technical infrastructure. The regret expressed by a former CBN governor carries symbolic importance, signaling that policymakers increasingly appreciate the trade-offs between conservative regulation and inclusive growth.
Current CBN leadership continues navigating this balance, having liberalised payment service bank operations while maintaining restrictions preventing full banking activities by telcos. Industry observers argue that complete removal of telco banking restrictions would accelerate financial penetration, strengthen remittance corridors, and reduce shadow economy transactions that escape monetary policy transmission mechanisms. The naira's stability depends partly on increasing formal financial sector participation, which widens the base for monetary policy implementation and improves inflation forecasting accuracy.
Sanusi's retrospective assessment suggests that regulatory caution, however well-intentioned, carried substantial opportunity costs for financial inclusion. The telecommunications sector's unique position as Nigeria's most trusted institution among many Nigerians remains underutilised for formal financial deepening. As policymakers design frameworks for the next phase of financial sector development, the lesson from this acknowledged regret is clear: innovation and inclusion sometimes require accepting calculated risks that conservative regulation would eschew.