Tinubu Demands Affordable Credit for Businesses After Bank Recapitalisation

President Bola Tinubu wants Nigeria’s newly recapitalised banks to do more than grow larger on paper. He is demanding that stronger balance sheets translate into affordable loans for businesses, manufacturers and millions of small and medium-sized enterprises.

At the Chartered Institute of Bankers of Nigeria’s annual conference in Abuja, Tinubu said the financial sector needed to move away from its heavy focus on financing government. His remarks were delivered by Finance Minister Taiwo Oyedele.

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A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit, manufacturing that is struggling cannot expand, and millions of productive MSMEs remain outside of the formal financial system.

“A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit, manufacturing that is struggling cannot expand, and millions of productive MSMEs remain outside of the formal financial system,” Tinubu said. He argued that the recapitalisation exercise should support capital formation in the real economy, including Nigerian businesses expanding across Africa.

The government is expanding guarantees, risk-sharing arrangements, blended finance and credit-enhancement mechanisms to reduce the risks of lending to productive sectors. Tinubu identified the National Credit Guarantee Company as central to that effort and called for a gradual shift from government securities toward private-sector lending.

“For too long, attractive returns on government securities have made lending to the productive economy comparatively less compelling,” he said. The president said stronger fiscal discipline and lower inflation should reduce pressure on government financing, support cheaper credit and encourage investment, production and employment.

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A bigger bank that does not finance a more productive economy is a sub-optimal outcome.

Tinubu acknowledged that improved macroeconomic indicators had not yet fully raised living standards. “Stability has returned. Credibility is rising. Prosperity is coming. These improvements matter, but we must not mistake macroeconomic stability for economic prosperity. Stability is the foundation. Prosperity is the destination,” he said.

Oliver Alawuba, chairman of Nigeria’s bank CEOs’ body and UBA’s group chief executive, said banks raised N6.4 trillion during the exercise, strengthening their resilience and capacity to finance large projects.

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Stability has returned. Credibility is rising. Prosperity is coming. These improvements matter, but we must not mistake macroeconomic stability for economic prosperity. Stability is the foundation. Prosperity is the destination.