The Nigeria Deposit Insurance Corporation (NDIC) has said that the ongoing banking recapitalization would play a key role in the country’s journey to becoming a $1 trillion economy, an ambition recently declared by President Bola Tinubu.
The Managing Director of the NDIC, Mr. Hassan Bello, stated this on Saturday during his keynote presentation at the Finance Correspondents Association of Nigeria (FICAN) Annual conference held in Lagos.
According to him, recapitalized Nigerian banks would be in a better position to fund the real sectors and impact all other sectors of the economy.
He added that recapitalization exercise would also promote a more stable financial system that is less susceptible to shocks, losses, and bank runs.
While highlighting efforts being put in place by the financial industry regulators including the Central Bank of Nigeria (CBN) to strengthen the financial system, Bello said the recapitalization process is also expected to attract significant foreign direct investments in Nigeria and boost the capital market.
“In all these, the objective of the CBN and NDIC is to promote a safe, sound, and stable banking system that is capable of providing the required financing for our productive cycles of the economy.
“This is crucial in achieving the $1 trillion economy that we all aspire to attain,” he said.
Also speaking on the theme of the conference ‘Nigeria’s Journey Towards a $1 Trillion Economy: Impact of Banks’ Recapitalization, Opportunities for Fintechs, Real Sector,” the Managing Director of United Bank for Africa, Oliver Alawuba, said $1 trillion economy aspiration requires not just incremental growth, but structural shifts in how the industry approaches banking, financial innovation, and sectoral development.
Alawuba, who was represented by the Executive Director, Finance & Risk Management at UBA, Ugochukwu Nwaghodoh, said the recapitalization policy must lead to a significant expansion of the provision of credit to the real sector, particularly in agriculture, manufacturing, and infrastructure.
“With a larger capital base, Nigerian banks should be well-positioned to finance long-term infrastructure projects and provide low-cost credit facilities to businesses that would drive the long-term growth,” he said.
Meanwhile, in his welcome address, the National Chairman of FICAN, Mr Chima Nwokoji, raised concerns about fluctuations in exchange rates and regulatory pronouncements, particularly the exclusion of retained earnings from capital calculations.
President Bola Tinubu last October at the 29th Nigeria Economic Summit in Abuja, had told business leaders and Nigerians that Nigeria’s economy can grow to $1 trillion by 2026.
Part of the ambitious target is to also take it further to a $3 trillion economy by 2030 with an assurance that his government can ensure “double-digit, inclusive, sustainable and competitive growth.”