CBN to banks: Put N4.65tn fresh capital to work or risk missing recapitalisation goal

The Central Bank of Nigeria (CBN) has shifted its focus from bank recapitalisation to credit creation, telling lenders that the N4.65 trillion raised should be channelled into productive sectors of the economy instead of  strengthening their  balance sheets

Speaking at the CNBC Africa Future of Banking Summit 2026, the CBN Governor, Olayemi Cardoso represented by Usman Moses Okpanachi, director of statistics at the CBN during his Keynote speech said the industry’s next test is how effectively it deploys the N4.65 trillion raised during the recapitalisation programme.

The recapitalisation exercise, which ended on March 31, 2026, saw 33 banks meet the new minimum capital requirements after raising N4.65 trillion, with about 73 percent of the funds coming from domestic investors and the remainder from international markets.

“The question is no longer whether the envisaged capital was raised. Rather, it is about what we will now do with the capital raised,” Cardoso said.

“A stronger banking system that lends timidly has missed the point. The capital that has been raised must find its way into the productive economy, into small and medium-sized enterprises, agriculture, infrastructure, and businesses that create jobs.”

According to data released by the CBN, credit to the private sector increased modestly by 0.6 percent month-on-month (MoM) to N81 trillion in May, recovering slightly from the decline recorded in April but remaining below recent peak levels.

This provides the clearest indication yet that the CBN expects banks to translate stronger balance sheets into higher credit creation rather than simply improving capital adequacy ratios.

The banking recapitalisation programme required international commercial banks to raise minimum capital to N500 billion, with lower thresholds for national and regional banks. The policy was introduced to strengthen lenders’ ability to absorb economic shocks, finance larger transactions and support Nigeria’s long-term growth ambitions.

According to Cardoso, scepticism initially surrounded the programme, with concerns that the higher capital thresholds could trigger industry disruption, constrain lending and weaken weaker institutions.

Instead, he said the exercise concluded with broad compliance and significant investor participation.

“About 73 percent of that capital was raised domestically from Nigerian investors who chose to invest in Nigerian banks. The balance came from international markets, which was a powerful vote of confidence in our financial system.”

However, he cautioned against treating the exercise as an end in itself.

“We did not ask the industry to raise capital merely so that balance sheets would appear more impressive. A bank’s capital determines the level of risk it can responsibly absorb on behalf of the real economy, the scale of transactions it can underwrite, the shocks it can withstand and the confidence with which it can finance investment and consumption.”

Payments strategy tied to economic growth

Cardoso also outlined the implementation priorities of the CBN’s Payment System Vision (PSV) 2028, describing digital payments infrastructure as central to Nigeria’s economic competitiveness.

He said the strategy seeks to build on Nigeria’s position as one of the world’s fastest-growing digital payments markets by improving interoperability, strengthening cybersecurity, expanding financial inclusion, encouraging innovation and deepening regional payment integration.

“Our goal is to achieve 95 percent financial inclusion by 2028,” he said.

“That means tens of millions more Nigerians holding an account or a wallet in their own name, protected by their own verified identity.”

Nigeria’s payments ecosystem currently supports approximately two million banking agents nationwide, while instant payment platforms and fintech companies have expanded access to financial services across urban and rural communities.

Cardoso said future growth would depend on building payment infrastructure that allows money to move seamlessly across financial institutions and borders.

“No Nigerian should have to think about which bank, which wallet or which provider sits on the other side of the transaction. The money should simply arrive.”

He added that cybersecurity and fraud prevention would become core design principles rather than compliance requirements.

“The payment system is only as strong as the confidence people place in it. Adoption will stop the moment people fear their money is not safe.”

Nigeria targets fintech exports

The CBN governor said the next phase of reforms is aimed at positioning Nigeria as a producer of financial technology rather than merely a consumer.

He said the apex bank would continue supporting open banking, artificial intelligence, ISO 20022 payment messaging standards and other technologies capable of improving efficiency across the financial system.

“Our aspiration is that Nigeria moves from being a fintech adoption market to a fintech production economy. The next globally competitive fintech should be built in Lagos, Abuja or Kano on Nigerian infrastructure and exported to the world.”

He also linked payment reforms to the success of the African Continental Free Trade Area, noting that reducing cross-border payment costs would improve regional trade.