The Central Bank of Nigeria has described the stronger capital buffers achieved during the two-year banking recapitalisation programme as only the first phase of reform, with the next stage focused on governance, risk management and productive lending.
At the 38th Seminar for Finance Correspondents and Business Editors in Abuja, themed “Towards a Robust and Resilient Financial System in the Post-Banking Sector Recapitalisation Era,” CBN Deputy Governor, Corporate Services, Dr. Muhammad Sani Abdullahi, said 33 banks had met the revised minimum capital requirements announced in March 2024, raising a combined N4.65 trillion.
“Capital, however, is a starting point. Boards and management must maintain sound controls, recognise risks early and lend on the strength of viable projects,” Abdullahi said. He added that banks with risky capital exposure could be required to raise more capital to strengthen their balance sheets.
The CBN stressed that the programme’s success should not be judged solely by the amount of capital raised. Abdullahi said the assessment should instead focus on the quality of banking services and the productive lending supported by the stronger capital base. He linked the reform to Nigeria’s ambition of building a $1 trillion economy by 2030, which he said would require banks capable of mobilising and allocating capital at a much larger scale.
Stronger capital buffers, he noted, should enable banks to finance long-term infrastructure, support industrial expansion, facilitate international trade and compete more effectively in regional and global markets. The benefits should also reach rural communities, women and young entrepreneurs, as well as agriculture, manufacturing, services and infrastructure.
Governance was framed as the next test for the banking sector. Abdullahi cautioned that stronger balance sheets could still be undermined by poor governance and excessive risk-taking, urging boards and management to demonstrate integrity, accountability and transparency while strengthening internal controls. The CBN said its supervisory focus would extend beyond traditional credit exposures to risks arising from an increasingly digital and interconnected financial system, including market, liquidity and operational risks, cybersecurity, third-party dependencies and climate-related financial risks. The apex bank will continue to monitor governance, asset quality, liquidity and large exposures, with emphasis on risk-based supervision, macroprudential surveillance and enhanced stress testing.
