CBN bank recapitalisation sees 32 banks meet new capital rules as reforms boost stability, reserves, and investor confidence

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, on Thursday announced in Abuja that 32 banks have met the new capital requirements under the ongoing recapitalisation programme ahead of the March 31, 2026 deadline.

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Speaking at the Monetary Policy Forum, Cardoso said the progress represents a significant milestone for the financial system, strengthening banks’ resilience and capacity to support long-term economic growth.

“The banking sector recapitalisation programme has recorded commendable progress, with 32 banks having already met the revised capital requirements,” he said, adding that the development positions the sector to mobilise capital and support Nigeria’s ambition of building a $1tn economy.

The forum, the first for 2026, forms part of the apex bank’s commitment to open engagement and collaborative policymaking with stakeholders across the economy.

Cardoso explained that the reforms were introduced in response to severe macroeconomic challenges inherited in 2023, including surging inflation, exchange rate instability, and weakened policy credibility.

Inflation had climbed to 29.9 per cent in January 2024, driven by food prices, currency pressures, and supply constraints.

He noted that monetary financing had risen sharply, with Ways and Means advances reaching N26.95tn by May 2023, while foreign exchange reserves weakened and a backlog of over $7bn weighed on the market.

In response, the central bank implemented decisive reforms, sharply reducing Ways and Means financing to N2.84tn by January 2026, restoring compliance with legal limits and reinforcing policy discipline.

The apex bank also adopted an aggressive monetary tightening stance in 2024, raising interest rates by 875 basis points to curb inflation, before gradually easing to 26.5 per cent in February 2026 as conditions improved.

According to Cardoso, these measures have delivered measurable gains. Inflation declined from 34.8 per cent in December 2024 to 15.06 per cent in February 2026, while exchange rate stability improved and foreign exchange liquidity strengthened.

External reserves rose from $38.34bn in February 2025 to $50.12bn in February 2026, with net reserves increasing sharply from $3.99bn in 2023 to $34.80bn by the end of 2025.

The country also recorded a $4.59bn balance of payments surplus in the third quarter of 2025.

The CBN bank recapitalisation programme has also attracted significant investment, with Nigerian banks raising N4.61tn in new capital, including 27 per cent from foreign investors.

Cardoso highlighted broader reforms across the banking sector, including stricter insider lending rules, a risk-based capital framework, and enhanced supervision supported by digital tools such as early warning systems.

In the foreign exchange market, the apex bank cleared outstanding obligations, introduced a willing-buyer, willing-seller system, and strengthened transparency, contributing to a sharp reduction in the parallel market premium.

The reforms have drawn global recognition, with rating agencies upgrading Nigeria’s outlook in 2025 and international institutions commending efforts to restore credibility and discipline in monetary policy.

Despite the progress, Cardoso cautioned that risks remain, including geopolitical tensions, oil price volatility, and domestic supply constraints.

However, he expressed optimism that the most challenging phase of adjustment is over, projecting economic growth of 4.49 per cent.

Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, commended the monetary policy team for its reforms and emphasised the importance of coordination in sustaining macroeconomic stability.

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The Deputy Governor, Economic Policy Directorate at the CBN, Muhammad Abdullahi, said the Monetary Policy Forum has become a critical platform for dialogue, ensuring that policy decisions remain responsive to evolving economic realities.