In his goodwill message at the 40th anniversary of The Guardian Newspapers in Lagos on Tuesday, President Bola Tinubu emphasized that bank recapitalisation was crucial to achieving his administration’s $1 trillion economy.
Represented at the event by his Special Adviser on Information and Strategy, Bayo Onanuga, Tinubu said: “Amidst the general lull in global economy, our ambition to attain a $1 trillion economy appears daunting. But we believe it is achievable, with God on our side and our collective determination. This explains why the Vice President and I have been on the road, trying to attract huge investments in various facets of our economy: agriculture, oil and gas, renewable energy and others.
He added: “To arrive at the $1 trillion economic destination, we believe that we must address the capital adequacy of our banks that will provide the fuel for the journey.”
The CBN governor, Dr Olayemi Cardoso, stated this in his speech at the 2023 Bankers Dinner on Friday night.
According to Cardoso, while there has been stability in the banking sector, banks in the country were not adequately capitalised to meet the need of a $1 trillion economy which the present government was aiming to achieve.
“It is crucial to evaluate the sufficiency of the banks”, Cardoso said, noting that the CBN will be directing banks to increase their capital base.
He added: “It is not just about the stability of the financial system in the present moment, as we have already established that the current assessment shows stability. However, we need to ask ourselves: Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1.0 trillion economy in the near future? In my opinion, the answer is “No!” unless we take action. Therefore, we must make difficult decisions regarding capital adequacy. As a first step, we will be directing banks to increase their capital.”