CBN Insists Building $1trn Economy Requires Strengthening Of Nigerian Banks

The Central Bank of Nigeria (CBN) has disclosed that the proposed bank recapitalisation is needed as a fuel for the government’s $1 trillion economy ambition and a sustainable financial sector in Nigeria.

This was stated by the representative of the governor of Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, the director, Financial Policy and Regulation, Bala Mustafa at the 2023 Nigeria Sustainability Summit held yesterday in Lagos. The event was facilitated by the European Organisation for Sustainable Development (EOSD) and Access Holdings Plc as the host.

Mustafa said, the recapitalisation will cushion potential losses and fuel the government’s ambition of reaching a $1 trillion economy by 2030, saying, “the 2005 bank recapitalisation, which increased minimum capital requirements from N2 billion to N25 billion, proved its worth just three years later during the global financial crisis. It bolstered the Nigerian banking system, preventing widespread collapse and protecting the economy from severe consequences.”

He noted that, “fast forward to today, with new macroeconomic challenges on the horizon. We have an opportunity to build on that previous success. By ensuring banks are adequately capitalized, we can cushion potential losses, fuel the government’s ambition of reaching a $1 trillion economy, and importantly, do so in a way that prioritises sustainability for future generations.”

Mustapha noted that, back in 2012, the apex nank led the charge in terms of a statement of commitment to meet sustainable banking principles and ever since more recently, it has been looking to take things to a much higher level by incorporating climate-related concentrations into the principles.

Head, group sustainability, Access Holdings, Omobolanle Victor-Laniyan stated that, “reflecting on the challenges that confronted our nation in recent times, we recognize the urgent need for a sustainable approach to development. The private sector has a pivotal role to play, leveraging its resources, innovation, and influence to drive positive change.”

She said: “it is in this spirit that we convene the Nigerian Sustainability Summit, to harness the expertise, resources, and innovation within our reach.”

She emphasised that, “by leveraging our collective strengths, advocating for sustainable policies, and implementing innovative solutions, we can pave the way for a brighter, more sustainable future.”

The chairman, International Council of Sustainability Standards for Value Driven Financial Institutions and CEO, EOSD, Mr. Arshad Rab stated that “today is a special day for Nigeria as the world’s most comprehensive sustainability framework under the Sustainability Standards and Certification Initiative (SSCI) to make financial sector the centre of creating a crisis resilient and new Nigerian economy is formally being unveiled and deliberated.”

He said that this summit also provides an opportunity to get other major players in the economy, the corporate Nigeria to join and benefit from the mission of making Nigeria a high income, high skilled, technologically advanced, socially inclusive, and environmentally and climate friendly country.

He envisaged sustainability certified financial institutions to be at the forefront of this change to enable Nigeria move from conventional economic development to 21st century high speed, high innovation economic progress.