Bank Recapitalization Will Build $1tn Economy For Nigeria—CBN
The Deputy Governor, Corporate Services, Central Bank of Nigeria (CBN), Emem Usoro, has said the bank recapitalisation exercise being implemented by the apex bank is a critical step towards achieving Nigeria’s ambition of building a $1tn economy.
Usoro said this at the opening session of the 36th edition of the Finance Correspondents Association of Nigeria and Business Editors seminar held on Monday in Abuja.
The event had as its theme “Banking recapitalisation towards a $1tn economy.”
Earlier in 2024, the CBN announced an upward review of Nigeria’s minimum capital requirements for commercial, merchant, and non-interest banks. The minimum capital base for banks with international authorisation was increased to N500bn.
The minimum capital base for commercial banks holding national authorisation is N200bn, and for those with regional authorisation, it is N50bn. Merchant banks will also require a minimum capital requirement of N50bn, while non-interest banks holding national and regional authorisations must adhere to new minimum requirements of N20bn and N10bn, respectively.
Currently, Nigeria’s economy is valued at around $250bn. According to her, achieving the $1tn target will require not only strong banks but also careful planning, robust policy direction, dutiful implementation, and broad stakeholder commitment across all sectors.
Usoro said, “As you may know, the global financial system and architecture have assumed a new dimension even before the new administration of Donald Trump in the United States of America. Globalisation has broken the limits of financial flows, and investors have inadvertently taken full advantage of the opportunities.
“However, countries and their financial systems must be prepared and ready to utilise opportunities created by financial globalisation through appropriate policy support and actions.
“As you are aware, the Nigerian banking system has also undergone reform, including bank recapitalisation and consolidation exercises. The 2004 banking sector consolidation and recapitalisation exercise, which set the limit of ₦25bn minimum capital fees for banks, brought the banks from 89 to 25. It was a noble idea that the Central Bank of Nigeria implemented in line with the emerging developments at that time.
“As we work towards building a $1tn economy, we must consider the recapitalisation of our banks to be able to fund, finance, and power the economy and favourably compete with its peers globally.
“We should particularly pay significant attention to bank recapitalisation to ensure that our banks are strong, resilient, and stable enough to carry out financial intermediation and the much-needed financing of development projects and programmes.
“Building a $1tn economy is not an easy task. It should require careful planning, robust and clear policy direction, dutiful implementation, and a wide commitment to stakeholders that will galvanise the various sectors of the economy.”
Usoro pointed out that discussions at the seminar, which include regulatory, industry, and media perspectives, are crucial in charting the way forward.
“As we aspire to build a $1tn economy, all hands must be on deck to achieve this. This gathering is essential to bring to the fore the bank’s effort and policy direction.
“The push for the capitalisation of banks will no doubt improve the strength and health of the financial system, deepen financial intermediation, and promote healthier competition that will strengthen our payment system.
“Therefore, it is my sincere expectation that at the end of your deliberation at this seminar, participants will better appreciate the rationale and ideas behind the goal of attaining a one trillion economy and its operational mechanism.”
Bank Recapitalization Will Build $1tn Economy For Nigeria—CBN is first published on The Whistler Newspaper
