CBN Urges Banks To Turn N4.65tn Capital Into Productive Loans
The Central Bank of Nigeria has urged banks to convert the N4.65tn raised under the recapitalisation programme into productive loans that support businesses, infrastructure and economic growth.
The Deputy Governor, Corporate Services, CBN, Dr Muhammad Abdullahi, said this on Tuesday in Abuja at the 38th Seminar for Finance Correspondents and Business Editors, themed ‘Towards a Robust and Resilient Financial System in the Post-Banking Sector Recapitalisation Era’.
Abdullahi said the success of the recapitalisation exercise should be measured beyond the amount of capital raised to include how the stronger balance sheets translate into productive lending and improved services.
“We should assess recapitalisation by the quality of banking services and productive lending it supports, as well as by the amount of capital raised,” he said.
He added, “Agriculture, manufacturing, services and infrastructure need finance suited to their cash flows and investment horizons. Smaller firms and households need dependable payments, appropriate products and fair treatment.”
According to him, 33 banks met the revised minimum capital requirements by the end of the two-year recapitalisation programme announced in March 2024 and raised a combined N4.65tn.
“By the end of the two-year programme announced in March 2024, 33 banks had met the revised minimum requirements and raised N4.65tn. That gives the banking system a stronger capacity to support larger financing needs as the economy grows,” Abdullahi said.
He linked stronger bank capital to Nigeria’s ambition to build a $1tn economy by 2030, saying lenders would have to mobilise and allocate capital on a much larger scale.
“Stronger capital buffers should enable banks to finance long-term infrastructure, support industrial expansion, facilitate international trade and compete more effectively in regional and global markets,” he said.
The deputy governor, however, warned that raising capital was only the beginning, stressing the need for stronger governance and risk management.
“Capital, however, is a starting point. Boards and management must maintain sound controls, recognise risks early and lend on the strength of viable projects,” he stated.
He said the apex bank would continue to scrutinise governance, asset quality, liquidity and large exposures, while expecting banks to strengthen cybersecurity, data protection and business continuity arrangements.
Abdullahi also said the benefits of recapitalisation must reach rural communities, women, young entrepreneurs and smaller businesses, adding that “stronger bank balance sheets should translate into wider access and better service.”
Providing an update on broader financial sector reforms, he said the average gap between the official and parallel foreign exchange rates had declined from 68.2 per cent between January and May 2023 to less than two per cent.
Total FX inflows stood at $10.82bn in July 2026, with $7.33bn, or nearly 68 per cent, coming from autonomous sources, while net foreign portfolio inflows reached $6.31bn between January and August. Gross external reserves stood at $55.60bn as of September 11.
Earlier, the Director of Corporate Communications and Investor Relations Department, CBN, Michael Akuka, said attention must now shift from whether banks could raise capital to what they do with their stronger balance sheets.
“It is no longer whether the banking sector can raise capital, but what a better capitalised banking sector does with the additional capital that it has to raise, and whether stronger balance sheets translate into a financial system that can finance real economic activities and maintain the confidence of the Nigerian people,” he said.
Akuka also urged financial journalists to scrutinise the impact of the reforms, saying public understanding of monetary policy and financial sector reforms depended significantly on the context provided by finance correspondents and business editors.
“A misunderstood policy is very nearly a failed policy,” he said, urging journalists to “go past the headline” and ask follow-up questions.
Also speaking, the Director of Stakeholder Engagement and Institutional Relations Department, CBN, Mrs Hakama Sidi-Ali, said improved engagement between the apex bank and the media had contributed to changes in the institution’s communication approach.
“We have revitalised the communication that comes from the Central Bank of Nigeria. And most of these changes that have set the pace for other institutions to come in, most of them came from your counsel and advice,” she said.
Sidi-Ali, who disclosed that she was moving to a new role, described the media as a strategic stakeholder and urged financial journalists to maintain their engagement with the bank.
