CBN-Driven Bank Recapitalisation Poised to Boost Nigeria’s $1tn Economy Target

The Central Bank of Nigeria (CBN) has fast-tracked the recapitalisation of banks, a move expected to strengthen the country’s financial system and accelerate Nigeria’s journey towards a $1tn economy.

Governor of the CBN, Mr. Olayemi Cardoso, disclosed that the ongoing exercise, which will conclude by March 31, has already seen 20 banks meet their new capital requirements, with N4.05 trillion raised so far. The total capital expected by the end of the programme is projected at N5 trillion.

According to Cardoso, the recapitalisation is aimed at creating larger and more sophisticated banks capable of supporting major business transactions and funding critical sectors of the economy. “Achieving sustainable economic growth requires strong support from the financial system,” he said.

The exercise is closely monitored by a tripartite capital verification committee comprising the CBN, the Securities and Exchange Commission (SEC), and the Nigeria Deposit Insurance Corporation (NDIC). The committee ensures that newly raised funds undergo rigorous verification before banks can add them to their capital base.

Cardoso reassured that Nigeria’s banking system remains fundamentally sound. “Stress tests confirm that our banks are resilient and well-positioned to support economic growth, while risk management and Basel III compliance are being strengthened to safeguard the sector,” he said.

Experts believe the move will have long-term benefits. Oliver Alawuba, Group Managing Director of United Bank for Africa (UBA), described the recapitalisation as timely and strategic, noting it would enhance banks’ ability to fund infrastructure, industrial projects, and emerging sectors such as fintech and green energy.

Similarly, Prof. ‘Abiodun Adedipe, Founder of BAA Consult, highlighted that recapitalisation, alongside tax reforms and fiscal consolidation, is key to positioning Nigeria for sustainable economic growth. He pointed to the country’s youthful population, rapid urbanisation, and growing internet penetration as additional factors that could drive the economy forward.

On fiscal-monetary coordination, Cardoso emphasised that alignment between the CBN’s monetary policies and government fiscal reforms is critical. Measures such as the discontinuation of direct deficit financing, revenue optimisation frameworks, and enhancements to the Treasury Single Account (TSA) are expected to stabilise the macroeconomic environment.

“The stronger our banks, the better we can support MSMEs, fund critical sectors, and attract long-term investments. This recapitalisation is more than regulatory compliance; it’s about equipping Nigerian banks to operate at the scale required by a $1tn economy,” Cardoso concluded.