Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), has said the country’s banking sector is now positioned to support the scale of investment required for Nigeria’s economic transformation.
He spoke while delivering a keynote address at the Annual Distinguished Alumni Lecture held in celebration of Founders’ Day of the St. Gregory’s College Old Boys Association in Lagos.
According to Cardoso, Nigeria’s financial system has expanded significantly over the past two decades, with banks extending their operations across several African markets while financing trade, infrastructure, entrepreneurship and investment. However, he noted that expansion alone is not sufficient, stressing that growth must also be matched by resilience within financial institutions.
He explained that as economies grow and financial systems deepen, banks must also strengthen their capacity to support that growth in a sustainable manner. It was in response to this need that the Central Bank of Nigeria introduced the banking recapitalisation programme in 2024.
Cardoso described the recapitalisation exercise as more than a regulatory requirement, noting that it represents a strategic reform designed to ensure that Nigeria’s banking sector remains strong enough to finance the level of investment required to drive the country’s long-term economic transformation.
According to him, stronger capital buffers provide three critical advantages for the banking system. First, they protect banks against unexpected shocks in the financial system. Second, they expand the capacity of banks to lend, thereby supporting businesses and economic activity across the country. Third, they strengthen confidence among depositors, investors and international partners.
“In finance, confidence is everything,” Cardoso said, adding that progress across the banking sector since the introduction of the recapitalisation programme has been steady and meaningful.
He disclosed that as of March 12, 2026, thirty-three banks have successfully raised additional capital, while thirty have already met the new minimum capital requirements for their respective licence categories. The remaining institutions, he said, are currently undergoing the Central Bank’s routine verification process in line with the established compliance timeline.
Cardoso noted, however, that strong banks must operate within a resilient economic environment, which is why the Central Bank has focused on rebuilding the fundamental frameworks that support its core mandate of maintaining price stability.
“We have returned to an orthodox monetary policy environment and resisted pressures to continue quasi-fiscal interventions that previously distorted the macroeconomic landscape,” he said.
During the panel session, speakers emphasised that although recent monetary reforms may have helped stabilise Nigeria’s financial system, sustainable economic growth would require broader policy alignment beyond the Central Bank. They noted that monetary policy alone cannot drive long-term development and stressed the importance of stronger coordination between monetary and fiscal authorities.
The speakers included Tilewa Adebajo, chief executive officer of CFG Advisory; Bismarck Rewane, chief executive officer of Financial Derivatives Company; Olufemi Awoyemi, founder and chairman of Proshare Limited; and the moderator, Frank Aigbogun, chief executive officer of BusinessDay Media Limited.
According to the panelists, such coordination must also extend to trade, investment and industrial policies in order to create a coherent framework capable of driving productivity, investment and job creation across the economy.
The discussion also highlighted the persistence of poverty despite improvements in macroeconomic stability. One of the speakers observed that Nigeria would need to sustain economic growth above 7.5 percent annually in order to significantly reduce poverty levels.
Achieving such growth, the panelists argued, would require deliberate fiscal measures aimed at stimulating productivity and investment rather than relying solely on increased liquidity in the financial system. They stressed that growth should primarily be driven by fiscal authorities through structural reforms that strengthen economic activity.
Panelists also reflected on the vulnerability of the Nigerian economy to global shocks, noting that deeper integration with the global economy means external developments now have a stronger impact on domestic stability.
They cited geopolitical conflicts and commodity price volatility as examples of global developments that can quickly affect oil prices, government revenues and exchange rate stability. In view of this, policymakers were advised to adopt defensive strategies that protect national economic interests while strengthening the resilience of the domestic economy.
Another issue raised during the session was the role of the banking sector in supporting economic growth, particularly within the context of the ongoing bank recapitalisation programme.
Participants acknowledged concerns that many banks remain highly risk-averse, often preferring to invest in relatively safe assets rather than extend credit to businesses and productive sectors. While stronger capitalisation could improve lending capacity, they noted that improved macroeconomic stability and supportive policies would also be required to encourage banks to finance real sector activities.
The panellists further argued that high inflation remains a significant constraint to credit expansion and private sector investment. They explained that elevated inflation typically leads to higher interest rates, making borrowing prohibitively expensive for businesses.
According to the speakers, bringing inflation down to more stable levels would allow the financial system to function more efficiently, enabling banks to lend at lower interest rates while supporting broader economic growth.
In their concluding remarks, the speakers emphasised the importance of strong institutions, professionalism and leadership integrity in sustaining economic reforms. They noted that the success of policy initiatives often depends on the competence and character of those entrusted with public institutions.
They added that strengthening institutional independence, improving fiscal discipline and ensuring greater accountability within government structures would be essential for translating economic reforms into long-term national development.
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