ABUJA – The Chief Executive Officer of United Bank for Africa (UBA) Plc, Oliver Alawuba, has called on the federal government to provide tax incentives and breaks for financial institutions investing in infrastructure and mining sectors.
Speaking at the 36th Seminar of the Finance Correspondents Association of Nigeria (FICAN) in Abuja, Alawuba stressed the crucial need for legislative support to drive Nigeria’s economic transformation.
He urged the government to introduce tax incentives specifically for investments linked to the ongoing banking sector recapitalization, describing it as a “cornerstone for achieving Nigeria’s ambitious goal of becoming a one-trillion-dollar economy.”
Alawuba, who also chairs the Body of Banks’ Chief Executive Officers, highlighted the necessity of enabling legislation to facilitate long-term capital mobilization, strategic communication, capacity building, and strong collaboration among stakeholders.
Recapitalization: Key to Economic Growth
Alawuba commended the Central Bank of Nigeria (CBN)’s banking recapitalization initiative as a landmark policy designed to align the financial sector’s strength with Nigeria’s economic aspirations.
“It is a necessary and strategic step toward achieving the vision of a one-trillion-dollar economy,” he stated. “As banks, we view this not only as a compliance requirement but as an opportunity to reimagine our role as economic enablers.”
He emphasized that Nigeria’s journey towards a trillion-dollar economy hinges on the financial sector’s effectiveness in mobilizing capital, strengthening critical infrastructure, supporting the real sector, and accelerating digital transformation.
“Strong economies are built on the foundations of strong banks,” he added.
Challenges to Trillion-Dollar Goal
While acknowledging the significance of the recapitalization policy, Alawuba pointed out several challenges that could hinder Nigeria’s economic ambitions, including regulatory and policy inconsistencies, security concerns, financial accessibility, and low levels of financial inclusion.
He underscored the importance of sufficient capital buffers for banks to effectively finance both traditional sectors like oil and gas, agriculture, and manufacturing, as well as emerging industries such as Fintech, Green Energy, and Infrastructure.
“Recapitalization is beyond a regulatory action. It is a strategic policy designed to prepare the banking sector for the scale, complexity, and global competition that a trillion-dollar economy demands,” he explained.
Visionary Leadership Needed
Alawuba encouraged Nigerian banks to take the lead in compliance, innovation, and economic stewardship. He also urged regulators to provide guidance with wisdom and flexibility, ensuring that policies are designed to foster national development.
“Let us reimagine banking as a force for national development and commit ourselves to building an economy that works for every Nigerian,” he concluded, advocating for a collaborative effort to transform Nigeria’s financial landscape.
CBN’s Recapitalization Mandate
In 2024, the CBN introduced new minimum capital requirements for banks to enhance the resilience of Nigeria’s banking sector. The compliance window for these revised thresholds, which significantly raise the capital base for financial institutions, spans from April 2024 to March 2026.
The new minimum capital bases are:
- Commercial banks with international authorization: N500 billion
- Commercial banks with national authorization: N200 billion
- Commercial banks with regional authorization: N50 billion
- Merchant banks with national authorization: N50 billion
- Non-interest banks with national authorization: N20 billion
- Non-interest banks with regional authorization: N10 billion
