•₦4.65 Trillion Raised to Strengthen Financial System Resilience.
The Central Bank of Nigeria (CBN) has formally closed a 24-month banking-sector recapitalisation programme, announcing that Nigerian banks raised ₦4.65 trillion in new capital since the exercise began in March 2024.
In a statement on Wednesday, the apex bank said the exercise was completed alongside an “orderly exit” from regulatory forbearance and the introduction of a materially strengthened risk‑based capital adequacy framework. The new supervisory regime requires banks to conduct regular stress tests under defined scenarios and to maintain ongoing capital buffers.
“The recapitalised system is now positioned to support economic growth and withstand domestic and external shocks,” Governor Olayemi Cardoso said in remarks accompanying the announcement.
Stronger supervisory tools
The CBN said the strengthened framework compels banks to model capital adequacy against a range of adverse conditions — including currency depreciation, commodity-price shocks and broad credit deterioration — and to demonstrate that capital buffers are sufficient to absorb such stresses. The requirement brings Nigeria closer to international practice, where bodies such as the Bank of England, the European Banking Authority and the US Federal Reserve routinely subject banks to stress testing.
For investors, the CBN argued, the change is consequential: capital metrics reported by banks will now reflect “tested” positions rather than unaudited declarations, boosting transparency and confidence, particularly among foreign participants. International investors provided 27.45 percent of the ₦4.65 trillion raised, the bank confirmed.
Exit from forbearance and improved transparency
The bank said the recapitalisation proceeded in parallel with a phased withdrawal of regulatory forbearance — supervisory measures that had allowed some institutions to defer full recognition of balance‑sheet risks during economic stress. With that process complete, the CBN said, reported capital adequacy ratios now better reflect underlying balance‑sheet health.
The CBN reported that 33 banks are fully compliant with the recapitalisation requirements and that all institutions remained operational throughout the exercise. It also said sector capital adequacy ratios now exceed Basel benchmarks, citing minimum capital‑adequacy ratios of 10 percent for regional and national banks and 15 percent for internationally authorised institutions.
From rebuilding buffers to deploying capital
Analysts said the focus for markets will now shift from meeting capital targets to how banks deploy their strengthened balance sheets. The CBN has framed the recapitalisation not merely as a defensive measure, but as infrastructure to enable longer‑duration and larger financing — notably for infrastructure, manufacturing and the trade finance needed as Nigeria increases engagement under the African Continental Free Trade Area (AfCFTA).
“The objective is resilience plus growth,” the CBN said, noting that the supervisory enhancements, periodic review of prudential guidelines and a stronger intervention framework were designed to make capital both credible and usable in support of the broader economy.
What comes next
Observers say the tougher supervisory stance — regular, formalised stress testing and ongoing capital buffers — will raise reporting standards and reduce uncertainty for international investors. But they caution that the ultimate test will be how banks translate greater capital into lending for productive investment rather than short‑term gains.
With the formal compliance window closed, the CBN’s announcement signals a new phase in Nigerian banking supervision: less about accumulating capital and more about actively managing a sector that, according to the central bank, now has the resources and regulatory framework to play a larger role in economic recovery and growth.
