The Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, recently revealed that foreign investors are channeling funds into the country to invest in Nigerian banks as part of the ongoing recapitalization initiative.
Speaking at the Afrinvest 2024 Banking Sector Report Launch in Abuja, Cardoso, represented by the Acting Director of Financial Policy and Regulations, Mr. John Onoja, emphasized that his team is vigilant and will prevent the influx of illicit funds or the takeover of Nigerian banks by unsavory entities.
Cardoso highlighted that the recapitalization effort is crucial for bolstering the federal government’s ambition to achieve a $1 trillion economy by 2030.
He stated, “The recapitalization exercise of the Nigerian banking sector is a pivotal strategy aimed at further strengthening the resilience of the Nigerian banks and promoting sound financial systems in Nigeria. Importantly, it will support the government’s goal to achieve a GDP of $1 trillion by 2030. As I listened to the panelists today, we are glad that the capitalization drive has become a factor that has ignited a lot of activities in all the sectors already.”
The governor elaborated on the positive effects of the recapitalization program, noting, “The impact of the capitalization program, we all know, is definitely going to increase the lending capacity of the banks, because liquidity definitely is going to empower them to lend more to the relevant sectors, even like the panelists have indicated to us. Definitely, there are going to be increases in foreign investments. We are already seeing them; the foreign direct investments are already coming in. The banks can attest to that. Even the foreign exchange liquidity, we can see that a lot of them are through the certificates of capital importation; they are bringing in a lot of forex into the economy, which is going to also affect positively the liquidity situation in the forex market.”
He assured that rigorous enforcement of the Fit and Proper Persons criteria for new shareholders and senior management would ensure the exclusion of illicit funds and unqualified individuals from the banking sector.
“We will rigorously enforce our Fit and Proper Persons criteria for new shareholders, for board members, for senior management, to ensure that there are no illicit funds that will flow into the system, there are no uncleared persons that will take possession of the Nigerian financial institutions, and also to ensure that even the valuation of a bank whose major balance sheets are assured by the Central Bank of Nigeria,” the CBN governor said
Cardoso also highlighted the broader economic benefits, stating, “It is going to contribute to the GDP growth that we are talking about supporting the present administration. Not to talk about better risk management tendencies, improved credit ratings for some of these banks, because of the forex credits they take, the credit ratings are very, very important.”
He pointed out that the recapitalization exercise offers opportunities for retail investors, noting, “Another opportunity has come for the smaller investors to be able to own shares in the financial institutions, which we know have always been doing very well. The equity market also is already being boosted.”
Addressing concerns of foreign investors, Cardoso assured that their investments would be safeguarded, saying, “We are also conscious of the capitals that are going to be imported into the country especially from foreign direct investors. And we
