Recent Developments in Nigeria’s Banking Sector
The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has announced that 27 banks have raised additional funds since the commencement of the latest recapitalisation exercise. This was disclosed at the 60th Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria.
Recapitalisation Exercise
Nigerian banks have been raising funds to meet the fresh capital thresholds set for them by the CBN. The CBN directed commercial banks with international authorisation to increase their capital base to N500bn and national banks to N200bn, while those with regional authorisation are expected to achieve a N50bn capital floor. Non-interest banks with national and regional authorisations will need to increase their capital to N20bn and N10bn, respectively. The CBN gave the banks a deadline of March 2026.
Progress So Far
Cardoso reported that the process is firmly on track, with several banks already meeting the new capital thresholds. To date, 27 banks have raised capital through public offers and rights issues, and 16 have already met or exceeded the new requirements. This is a clear testament to the depth, resilience, and capacity of Nigeria’s banking sector.
Strengthening the Banking Sector
The CBN is taking decisive actions on regulatory forbearance, redesigning the credit-risk framework to enforce stronger governance, greater transparency, and firmer accountability across the sector. The goal is to break the boom-and-bust cycle that has accompanied past recapitalisation efforts. Micro, Small, and Medium Enterprises (MSMEs) remain central to these efforts, with microfinance lending expanding by over 14 per cent and new digital-credit products reaching more than 1.2 million small enterprises.
Economic Resilience
The CBN governor noted that Nigeria is now more than ever capable of withstanding external shocks. The deployment of the Electronic Forex Market Surveillance System, the shift to a single, market-determined foreign exchange rate regime, and enhanced risk-based banking supervision have strengthened Nigeria’s capacity to absorb external shocks. With oil now a smaller share of GDP and fiscal revenue, a sharp oil-price decline would be cushioned by the flexible FX regime, rising non-oil exports, and growing services trade.
External Reserves
The growth of the country’s external reserves has been mostly organic, with foreign reserves reaching $46.7bn by mid-November, the highest in nearly seven years. This provides over 10 months of forward import cover and significantly enhances the economy’s resilience. The CBN governor emphasized that the FX reserves are being rebuilt organically, not by borrowing, but through improved market functioning, stronger non-oil exports, and robust capital inflows.
Collaboration and Security
The Central Bank governor called for collaboration to tackle the rising insecurity in the country. The President of the CIBN, Pius Olanrewaju, highlighted the importance of the banking sector in supporting Nigeria’s economic recovery and expanding its capacity to finance the new direction of the economy.
Conclusion
In conclusion, Nigeria’s banking sector is making significant progress in meeting the new capital thresholds set by the CBN. The sector is demonstrating resilience and adaptability, and the CBN is taking decisive actions to strengthen the sector and enhance economic resilience. With the growth of external reserves and the expansion of microfinance lending, the sector is well-positioned to support Nigeria’s aspiration of becoming a $1tn economy by 2030. The banking sector must continue to prioritize lending to key growth sectors, including youth entrepreneurship, SMEs, and the creative economy, to drive economic growth and development.
