The Central Bank of Nigeria (CBN) has urged commercial banks to deploy the N4.65 trillion raised under the recently concluded banking sector recapitalisation programme into increased credit for businesses, infrastructure development, and other productive activities. This, the apex bank stressed, would accelerate economic growth. The CBN's call was made by Deputy Governor Dr. Muhammad Sani Abdullahi at the 38th Seminar for Finance Correspondents and Business Editors.
According to Dr. Abdullahi, 33 banks had satisfied the revised minimum capital requirements at the conclusion of the two-year recapitalisation programme announced in March 2024. The N4.65 trillion mobilised by the banks had significantly strengthened their financial positions, providing additional capacity to finance large-scale infrastructure projects, support industrial development, facilitate international trade, and compete in regional and international financial markets.
However, Dr. Abdullahi cautioned that raising additional capital alone would not guarantee a stronger financial system unless banks complemented their improved financial positions with effective corporate governance, prudent lending practices, and robust risk management. He emphasised that capital was a starting point, and boards and management must maintain sound controls, recognise risks early, and lend on the strength of viable projects.
The post-recapitalisation period, Dr. Abdullahi maintained, must be characterised by a measurable improvement in the banking sector's contribution to economic development, particularly through increased financing for agriculture, manufacturing, infrastructure, and services. Financial institutions must develop credit facilities that reflect the operational realities of businesses, including their cash flow requirements and longer investment periods.
Dr. Abdullahi linked the recapitalisation programme to the Federal Government's broader economic ambitions, explaining that achieving the targeted expansion of the Nigerian economy would require financial institutions with substantially greater capacity to mobilise domestic and international investment. He noted that stronger capital buffers would improve the ability of banks to withstand financial and economic shocks, absorb potential losses, and maintain credit supply during periods of economic uncertainty.
The additional capital, Dr. Abdullahi noted, would also provide opportunities for banks to invest in technological innovation, modernise their operations, and develop financial products capable of serving a wider segment of the population. However, he warned that the benefits of recapitalisation could be undermined by weak corporate governance, poor credit decisions, and inadequate oversight, stressing that bank boards and management teams must demonstrate greater integrity, accountability, and transparency in their operations.
On developments in the broader economy, Dr. Abdullahi highlighted improvements in Nigeria's foreign exchange market, external reserves, inflation, and economic growth, attributing the progress to a combination of monetary policy measures, oil receipts, remittance inflows, and global financial conditions. He disclosed that Nigeria's gross external reserves had risen to $55.60 billion as of September 11, 2026, while the reserve position at the end of August was sufficient to cover 11.3 months of imports.
Key points
- The CBN has urged commercial banks to deploy the N4.65 trillion raised under the recapitalisation programme into increased credit for businesses and infrastructure development.
- The recapitalisation programme has significantly strengthened the financial positions of banks, providing additional capacity to finance large-scale infrastructure projects and support industrial development.
- The CBN will sustain its regulatory oversight of the banking industry, with particular attention to corporate governance, asset quality, liquidity management, and large credit exposures that could threaten financial stability.
