The Deputy Governor of Corporate Services at the Central Bank of Nigeria, Emem Usoro, has emphasized that the ongoing bank recapitalisation drive is a crucial step in achieving Nigeria’s target of building a $1 trillion economy.
She made this assertion during the opening session of the 36th edition of the Finance Correspondents Association of Nigeria and Business Editors seminar, held on Monday in Abuja.
The seminar was themed “Banking Recapitalisation Towards a $1 Trillion Economy.”
Earlier in 2024, the CBN announced a new capital framework for banks operating in Nigeria, raising the minimum capital base for banks with international authorisation to N500 billion.
For commercial banks with national authorisation, the new threshold is N200 billion, while regional banks are required to hold a minimum of N50 billion.
Merchant banks also face a minimum of N50 billion, and non-interest banks are required to meet capital levels of N20 billion (national) and N10 billion (regional).
Nigeria’s economy currently stands at an estimated $250 billion.
According to Usoro, building a $1 trillion economy requires more than banking reforms it demands strategic foresight, inclusive policy design, and coordinated action from all sectors.
Usoro stated:
“As you may know, the global financial system and architecture have assumed a new dimension even before the new administration of Donald Trump in the United States of America.
“Globalization has broken the limits of financial flows and investors have inadvertently taken full advantage of the opportunities.
“However, countries and their financial systems must be prepared and ready to utilize opportunities created by financial globalization through appropriate policy support and actions.”
She reflected on the gains from past banking reforms, particularly the 2004 consolidation exercise:
“As you are aware, the Nigerian banking system has also undergone reforms including bank recapitalisation and consolidation exercises.
“The 2004 banking sector consolidation and recapitalisation exercise, which set the limit of N25bn minimum capital fees for banks, brought the banks from 89 to 25, was a noble idea that the Central Bank of Nigeria implemented in line with the emerging developments at that time.”
Usoro emphasized the importance of capital adequacy in sustaining economic transformation:
“As we work towards building a $1tn economy, we must consider the recapitalisation of our banks to be able to fund, finance, and power the economy and favorably compete with its peers globally.
“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 financings of development projects and programmes.
“Building a $1trn economy is not an easy task. It should require careful planning, robust and clear policy direction, dutiful implementation, and a wide commitment to stakeholders that will galvanize the various sectors of the economy.”
She also highlighted the significance of the seminar and its broader impact:
“As we aspire to build a $1trn economy, all hands must be on deck to achieve this. This gathering is essential to bring to the fore the bank’s effort and policy direction.
“The push for the capitalization of banks will no doubt improve the strength and health of the financial system, deepen financial intermediation, and promote healthier competition that will strengthen our payment system.”
Concluding her remarks, Usoro said:
“Therefore, it is my sincere expectation that at the end of your deliberation at this seminar, participants will better appreciate the rationale and ideas behind the goal of attaining a one trillion economy and its operational mechanism.”
