The Central Bank of Nigeria (CBN) has shifted its attention from whether banks can raise enough capital to how the stronger balance sheets created by the recapitalisation programme are used to finance businesses and other productive sectors of the economy.
CBN Deputy Governor, Corporate Services, Muhammad Sani Abdullahi, said the success of the recapitalisation exercise should be measured not only by the amount of capital raised but also by the quality of banking services and productive lending it supports. He spoke at the 38th Seminar for Finance Correspondents and Business Editors in Abuja.
The two-year recapitalisation programme, announced in March 2024, ended on March 31, 2026. According to the CBN, 33 banks met the revised minimum capital requirements and collectively raised about ₦4.65 trillion.
Abdullahi said the additional capital should strengthen banks’ capacity to finance sectors that generate economic activity, including agriculture, manufacturing, services and infrastructure. He said lending decisions should be based on viable projects and appropriate assessment of risks.
The CBN’s position marks a change in the emphasis of the banking sector reform. With the capital-raising exercise completed, the regulator is now placing greater attention on how banks manage and deploy their enlarged balance sheets rather than simply whether they have met the new capital thresholds.
The central bank is also maintaining closer scrutiny of governance, asset quality, liquidity and large exposures. Abdullahi warned that stronger capital buffers would not by themselves guarantee a resilient banking system without effective risk management and sound governance.
For businesses, the significance of the shift will depend on whether banks translate their stronger capital positions into greater access to finance. The CBN has specifically highlighted the need for financing suited to the cash-flow and investment needs of sectors such as manufacturing, agriculture, services and infrastructure.
The recapitalisation also gives banks greater capacity to absorb losses and support larger financing needs as the economy expands. However, the CBN’s message suggests that simply having more capital on banks’ balance sheets is not the final measure of the reform’s impact.
The next phase will therefore be closely watched by businesses and investors for evidence of stronger credit supply, improved banking services and disciplined lending. The CBN said it would continue using risk-based supervision, macroprudential surveillance and stress testing as it oversees the post-recapitalisation banking system.
