"How Banks Can Accelerate Nigeria\u2019s $1trn GDP Target"

" How Banks Can Accelerate Nigeria\u2019s $1trn GDP Target \r\n\r\nAs the race for bank recapitalisation intensifies, the Central Bank of Nigeria (CBN) says that the sector is essential to actualising Nigeria\u2019s $1 trillion gross domestic product (GDP) target.\r\n\r\nOlubukola Akinniyi Akinwunmi, director, Banking Supervision Department, CBN, said this on Monday at the ongoing seminar for finance correspondents and business editors, in Abuja.\r\n\r\nHe noted that the CBN\u2019s objective is to strengthen the financial systems stability to absorb any form of unexpected systemic shock.\r\n\r\nNigeria aims to attain a $1 trillion economy by 2030. In a strong move aimed at achieving this goal, the CBN in March 2024 announced a significant increase in paid-in capital requirements (share capital plus share premium) for commercial, merchant and non-interest banks.\r\n\r\nBanks have three ways to comply \u2013 through equity injections, mergers and acquisition, and downgrading of their licence authorisation.\r\n\r\nA foremost rating agency, Agusto, projected an inflow of circa N4 trillion into the banking system at the end of the banks recapitalisation exercise.\r\n\r\n\u201cNigerian banks are making significant progress in raising core capital to meet new paid-in capital requirements and are generally on track to meet the end-1Q26 deadline,\u201d Fitch Ratings said.\r\n\r\n\u201cThis is supporting a recovery in capitalisation from the impact of naira devaluation, providing fuel for business growth. It also reduces the likelihood of significant banking sector consolidation,\u201d it noted.\r\n\r\n Investors\u2019 response \r\n\r\nThe CBN noted on Monday that investors are responding positively to the stability around Nigeria\u2019s foreign exchange (FX) rate, noting that it is attracting investments into the country.\r\n\r\n\u201cIt is very essential that we understand the implications of global developments, as grave as they may be and appreciate the efforts at stabilising the economy,\u201d Akinwunmi said at the seminar themed, \u2018Playing the Global Game: Banking Recapitalisation Towards a $1trillion Economy.\u2019\r\n\r\nAs President Donald Trump\u2019s sweeping tariffs hike rattles global markets, Akinwunmi noted that CBN\u2019s policies, including the banking sector recapitalisation, is ahead of the curve in ensuring the system absorbs external shocks.\r\n\r\n\u201cNigeria needs foreign direct investment (FDI). We want to promote consolidation and innovation. Recapitalisation will enable banks to take bigger risks and still stay afloat in times of trouble, support different sectors of the economy and improve confidence in the banking system,\u201d he added.\r\n\r\nAkinwunmi further noted that a stable macroeconomic environment would enable banks to respond adequately to the funding needs of critical sectors of the economy.\r\n\r\nThe environment is appropriately primed to encourage banks to continue to lend to the real sector, he noted.\r\n\r\nWelcoming the participants, Emem Usoro, deputy governor, corporate services, CBN, said, \u201cWe must consider the recapitalisation of our banks to be able to fund, finance and power the economy and favourably compete globally with its peers in other climes.\u201d\r\n\r\nShe said, \u201cWe 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 financing of development projects and programmes.\u201d"

"How Banks Can Accelerate Nigeria\u2019s $1trn GDP Target"

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