The Central Bank of Nigeria has reiterated the critical importance of building strong, resilient, and stable banks as the country works towards achieving the ambitious $1 trillion economy target set by President Bola Tinubu for 2030.
Speaking during the opening of the 36th CBN Seminar for Finance Correspondents and Business Editors held in Abuja on Monday, the Deputy Governor, Corporate Services, Ms. Emem Usoro, emphasised that the ongoing recapitalisation of Nigerian banks is a deliberate move to align the financial sector with the federal government’s economic growth agenda.
Delivering her address through the Acting Director of Corporate Communications, Mrs. Hakama Sidi-Ali, Usoro stated, “As we work towards building a One-Trillion Dollar Economy, we must consider the recapitalisation of our banks to be able to fund, finance and power the economy and favourably compete globally with its peers in other climes.
“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 one trillion-dollar economy is not an easy task. It would require careful planning, robust and clear policy direction, dutiful implementation, and averred commitment from stakeholders that would galvanise the various sectors of the economy.
“The push for a recapitalisation of banks would no doubt improve the strength and health of the financial system, deepen financial intermediation and promote healthier competition that would strengthen our payment system.”
She noted that with Nigeria’s economy currently valued at approximately $250 billion, achieving the $1 trillion target by 2030 requires a concerted national effort involving the public and private sectors.
Usoro also highlighted the evolving dynamics of the global financial system, citing the shifts that began during the administration of former United States President Donald Trump, which demanded greater preparedness and strategic policy adaptation by countries seeking to harness the benefits of globalisation.
In a presentation titled “Banking Recapitalisation Towards a One Trillion Dollar Economy,” Director of Banking Supervision at the CBN, Dr. Olubukola Akinwumi, said the apex bank has shifted from its previous approach to bank regulation and is now proactively ensuring banks meet their Cash Reserve Requirement obligations and are better positioned to play a more impactful role in economic development.
According to him, banks that build stronger capital bases will be better equipped to handle large-scale, high-value transactions such as infrastructure financing.
“As you may know, the government has already begun talking about infrastructure concessions. So, the environment is being primed for banks to benefit from building appropriate capital bases that allow them to do more business.
“The incentive, therefore, lies in the value the economy offers—encouraging banks to continue lending and to earn better returns from their lending activities,” Akinwumi stated.
He further revealed that the CBN will continue engaging with Deposit Money Banks to enhance credit flow to the real sectors of the economy, including agriculture, manufacturing, and Small and Medium Enterprises, which he described as the engines of economic growth.
“Regarding whether agriculture, manufacturing, and infrastructure will be powered—those are critical sectors for us to achieve a trillion-dollar economy. That fact is not lost on the banks. We continue to engage with them to lend to these critical sectors of the economy.
“Those sectors are also being prioritised by the government. If you look at the budget for this year, those sectors—health, education, infrastructure, agriculture—are prioritised. That, in itself, is a signal to the banks that when the government supports these sectors, they are ripe for business,” he said.
Offering an industry perspective during the seminar, the Group Managing Director of United Bank for Africa (UBA), Mr. Oliver Alawuba, called on the fiscal and monetary authorities to show greater confidence in the capacity of Nigerian banks by entrusting them with the management of a portion of the country’s external reserves.
He said, “We need to believe in Nigerians that we can do it. We are managing the reserves of other African countries in some of the countries that we are present. We want Nigerians to trust Nigerian banks. We need to be trusted with some of the nation’s reserves. We can start with maybe 10 percent or 20 percent and so on.”
Alawuba, however, expressed concern that the current economic growth rate of 3.8 percent falls far short of the minimum 10 percent growth required annually to achieve the $1 trillion target by 2030. He suggested that without accelerated growth and bold fiscal reforms, the vision might remain elusive.
