CBN: Banking Sector Essential to Power Nigeria’s $1 Trillion Economy Goal
Investors Responding Positively to FX Stability, Says Banking Regulator
Abuja – The Central Bank of Nigeria (CBN) has reaffirmed the crucial role of the banking sector in achieving Nigeria’s ambitious target of becoming a $1 trillion economy by 2030, as the recapitalization drive gains momentum.
Strengthening Financial System Stability
Olubukola Akinniyi Akinwunmi, Director of Banking Supervision at CBN, emphasized during a seminar for finance journalists in Abuja that the regulator’s primary objective is to “strengthen the financial systems stability to absorb any form of unexpected systemic shock.”
The CBN in March 2024 announced significant increases in capital requirements for commercial, merchant, and non-interest banks, giving institutions three compliance options:
- Equity injections
- Mergers and acquisitions
- Downgrading license authorization
Positive Market Response
Rating agencies have noted progress:
“Nigerian banks are making significant progress in raising core capital to meet new paid-in capital requirements and are generally on track to meet the end-1Q26 deadline,” Fitch Ratings reported.
Agusto & Co. projects approximately N4 trillion will flow into the banking system through the recapitalization exercise.
FX Stability Attracting Investments
Akinwunmi highlighted that investors are responding positively to Nigeria’s foreign exchange rate stability, which is attracting new investments into the country.
“It is very essential that we understand the implications of global developments and appreciate the efforts at stabilizing the economy,” the CBN director stated.
Seminar Focuses on $1 Trillion Vision
The Abuja seminar, themed “Playing the Global Game: Banking Recapitalisation Towards a $1trillion Economy,” explored the implications and prospects of the banking sector reforms.
Akinwunmi explained: “Recapitalisation will enable banks to take bigger risks and still stay afloat in times of trouble, support different sectors of the economy and improve confidence in the banking system.”
Emem Usoro, CBN Deputy Governor for Corporate Services, emphasized the need for Nigerian banks to be “strong, resilient and stable enough to carry out financial intermediation” to compete globally.
For more details, read the original article on BusinessDay.