A finance expert, Ayooluwa Animashaun, has stated that the N500bn, N200bn, and N50bn recapitalisation benchmarks set by the Central Bank of Nigeria (CBN) for the nation’s banks will significantly strengthen the resilience of the banking system, foster economic growth, and enhance international competitiveness.
In March of this year, the nation’s apex bank directed commercial banks with international authorization to increase their capital base to N500bn, national banks to N200bn, and those with regional authorization to meet a N50bn capital threshold.
Commending the policy, Animashaun, in a paper titled Nigeria’s Banking Giants: A New Era: A Deep Dive into the Recapitalisation of Nigeria’s Banks, noted that the new capital requirements, to be met by May 31, 2026, would strategically strengthen financial stability, reduce the risk of systemic failures, and protect depositors’ funds.
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He argued that injecting fresh funds would better position these institutions to withstand economic downturns, support lending activities, and comply with regulatory standards. He emphasized that a robust and well-capitalized banking sector is crucial for promoting economic growth.
“Moreover, recapitalisation can enhance the competitiveness of Nigerian banks on the global stage, enabling them to attract foreign investment and participate effectively in international markets. By injecting fresh funds, these institutions can more effectively weather economic downturns, support lending activities, and adhere to regulatory standards,” he stated.
On the impact of foreign investments, Animashaun noted that bank recapitalisation could be a game-changer for foreign investment in Nigeria. He highlighted that one of the key benefits is enhanced financial stability, explaining that a stronger banking sector would better withstand economic shocks, reduce the risk of systemic failures, and create a more stable investment environment. This, in turn, would instill greater confidence in foreign investors, leading to increased capital inflows.
The finance expert also pointed out that recapitalised banks would be better equipped to manage risks, thus reducing the likelihood of financial crises that could deter investment.
“It will also deepen the market. A more robust banking sector would provide a wider range of financial services to foreign investors, facilitating their operations in Nigeria. Besides, there is increased stability and confidence, as recapitalised banks are generally perceived as more stable and financially sound, which can boost investor confidence, making the country more attractive to foreign investors,” he stated.
However, Animashaun stressed that for the policy to succeed, all stakeholders must collaborate in the recapitalisation efforts by providing essential financial services to businesses and individuals.
“As Nigerians, we can all contribute to this success by supporting our banks and encouraging others to do the same. As these institutions continue to evolve, it is essential to monitor their progress and evaluate the impact of recapitalisation on the broader economy,” he added.
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