$1trn economy: Recapitalisation to improve Nigeria’s banks strength, promote healthier competition, says CBN
The Central Bank of Nigeria (CBN) on Monday said recapitalisation of Nigeria’s banks to power a $1trillon economy would no doubt improve the strength and health of the financial system, deepen financial intermediation and promote healthier competition as well as usher in a robust payment architecture needed to strengthen payment system.
Delivery a keynote speech at the 36th seminar for Finance Correspondents and Business editors in Abuja, Deputy Governor, Corporate Services, CBN, Ms. Emem Usoro noted that building a $1trillion economy is not an easy task, stressing that it would require careful planning, robust and clear policy direction, dutiful implementation, and averred commitment from stakeholders that would galvanise the various sectors of the economy.
She revealed that Nigeria economy currently valued at approximately $250billion, stating that as President Bola Tinubu’s aspires to build $1 trillion economy, all hands must be on deck to push with strong ideas to sustain this vision that has very noble capabilities of making Nigeria economy develop faster and improve the quality of lives of citizens.
Speaking on the theme of the seminar, “Playing the Global Game: Banking Recapitalization Towards a One-Trillion Dollar Economy,” she encouraged frank discussions with far-reaching recommendations that would enhance understanding of the workings of the global financial system and how to position the Nigerian Banks to take full advantage of the opportunities presented by the dynamics of these initiatives.
While sharing some insights relating to the theme of the seminar, she said, “As you may know, the global financial system and architecture have assumed a new dimension even before the new administration of Donald Trump in the United States of America.
“Globalisation has broken the limits of financial flows, and investors have inadvertently taken full advantage of the opportunities. However, countries and their financial systems must be prepared and ready to utilise opportunities created by financial globalisation through appropriate policy support and actions.
“There is no gain saying that the financial system’s size and quality play critical roles in powering and financing an economy. Literature has established that financial resources, complimented by quality human capital and technology, remain the major driving forces of industrialisation since the emergence of the 4th industrial revolution.
“To play this critical role, the banking system must grow, expand and deepen through deliberate policy efforts. As you are aware, the Nigerian banking system has also undergone reforms, including bank recapitalisation and consolidation exercises.
“The 2004 banking sector consolidation and recapitalisation exercise, which set a limit of N25 billion minimum capital base for banks, brought the Nigerian banks from 89 to 25, was a noble idea that the Central Bank of Nigeria implemented in line with emerging developments at that time. ”
She expressed further that, “The current global system has manifested even more dynamic paradigms, with intense globalisation and guided protectionism, with countries favouring trade wars and retaliations. However, it brings to the fore the readiness and preparedness of our dear country and banking system to build a more sophisticated, vibrant economy.
“As we work towards building a $1 trillion Economy, we must consider the recapitalisation of our banks to be able to fund, finance and power the economy and favourably compete globally with its peers in other climes.
“I think that if the current protectionist development approach by the US and other big economies continues to pervade the global system, we should particularly pay significant attention to bank recapitalisation to ensure that our banks are strong, resilient and stable enough to carry out financial intermediation, and the much-needed financing of development projects and programmes.
“Ladies and gentlemen, I think this gathering is essential to bring to the fore the Bank’s efforts and policy direction, especially as we navigate towards building a one trillion-dollar economy. It is also expected to elicit views from the vibrant minds here today.
“I know today’s meeting brings to bear very important stakeholders in the banking industry and financial ecosystem who are well prepared to share very insightful thoughts on the subject matter of this conference.”
