In a significant move to align with President Bola Tinubu’s ambitious goal of achieving a $1 trillion economy, Dr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), announced plans to direct Deposit Money Banks to bolster their capital bases. Speaking at the 58th Annual Dinner of the Chartered Institute of Bankers of Nigeria in Lagos, Cardoso emphasized the need for a robust banking industry to support the envisioned larger economy.
Acknowledging the challenges faced by the apex bank, Cardoso highlighted the imperative of evaluating the adequacy of the banking industry to meet the demands of a $1 trillion economy. He emphasized that the current stability of Nigerian banks might not be sufficient, urging decisive action to increase capital. “As a first step, the CBN will be directing banks to increase their capital,” he declared.
Addressing concerns about the recent negative perception of the CBN, Cardoso attributed it to corporate governance failures, diminished independence, deviations from core mandates, inefficient forex rules, and ventures into development financing. He expressed optimism that strategic measures and corrective actions could restore macroeconomic stability.
Cardoso also touched upon the impact of the fluctuating exchange rate on business growth, pledging transparency and fairness in the CBN’s functions. He highlighted the positive effects anticipated from the removal of the petrol subsidy, the adoption of a floating exchange rate, and other government policies in the medium term.
On the CBN’s past activities, Cardoso acknowledged quasi-fiscal policies under his predecessor, Mr. Godwin Emefiele, which injected N10 trillion into the economy through various intervention programs. He affirmed his commitment to addressing institutional deficiencies, restoring corporate governance, strengthening regulations, and implementing prudent policies during his tenure.
Various stakeholders, including the President/Chairman-of-Council at the CIBN, Ken Opara, and the Chairman of the Body of Bank Chief Executive Officers, Ebenezer Onyeagwu, expressed their perspectives on the initiatives undertaken by the CBN. The banking industry, according to Onyeagwu, is strengthening, with the issue of FX forwards being addressed.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, also provided a positive outlook, stating that the industry is thriving and relatively healthy. As the CBN under Dr. Yemi Cardoso takes steps to address economic challenges, stakeholders express confidence in the potential positive impacts on the Nigerian economy.
Representatives from various sectors, including the Vice President, Senator Kashim Shettima, and Lagos Governor Babajide Sanwo-Olu, echoed their confidence in the new leadership’s ability to drive positive change in the country’s economic landscape.