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🇳🇬 Nigeria /Economy & Trade

Nigeria's Central Bank Urges Banks to Invest New Capital in Productive Sectors

From ThisDay · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

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  • Nigeria's Central Bank Governor Olayemi Cardoso urged banks to deploy newly raised capital into productive sectors like SMEs, agriculture, and infrastructure.
  • The banking industry successfully raised N4.65 trillion in fresh capital through a recapitalization exercise ending March 31, 2026, meeting new minimum requirements.
  • Cardoso stressed that the recapitalization's goal is to enhance banks' capacity to support economic growth, not just increase balance sheet size.

Central Bank of Nigeria (CBN) Governor Olayemi Cardoso has challenged the nation's banks to strategically channel the substantial capital raised during the recent recapitalization exercise into key productive sectors. He emphasized that stronger financial institutions must translate into increased financing for businesses that drive job creation, boost productivity, and generate foreign exchange.

Two years ago, when the Central Bank of Nigeria directed banks to strengthen their capital base, there was no shortage of scepticism, some of which, by the way, was not entirely misplaced.

— Olayemi CardosoGovernor Cardoso reflected on the initial skepticism surrounding the bank recapitalization directive.

Speaking at the Future of Banking Summit 2026 in Lagos, Cardoso highlighted that the successful completion of the recapitalization, which mobilized N4.65 trillion by March 31, 2026, marks a new phase for the banking industry. Thirty-three banks met the revised minimum capital requirements. Notably, approximately 73 percent of this capital was sourced domestically from Nigerian investors, with the remainder coming from international markets, signaling confidence in Nigeria's financial system.

The thresholds were demanding, N500 billion for international banks, with proportionate requirements across the national and regional categories. There were warnings of disruption, a credit squeeze, and widespread distress.

— Olayemi CardosoCardoso detailed the challenging capital requirements set for banks.

Cardoso cautioned against viewing the recapitalization as an end in itself. He clarified that the objective was never merely to inflate balance sheets but to bolster banks' capacity to absorb risk, underwrite larger transactions, withstand economic shocks, and confidently finance investment and consumption. The critical question now, he stated, is how this newly acquired capital will be deployed to support the real economy and foster sustainable economic growth.

Nonetheless, the programme proceeded and concluded on 31 March 2026, having mobilised N4.65 trillion in fresh capital. Thirty-three institutions met the capital requirements applicable to their licences.

— Olayemi CardosoCardoso announced the successful outcome of the recapitalization exercise.
DistantNews Editorial

Originally published by ThisDay in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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