The Central Bank of Nigeria (CBN) has confirmed significant progress in the ongoing bank recapitalisation programme, with Governor Olayemi Cardoso announcing that sixteen banks have already met the new capital requirements, while another twenty-seven have raised capital through various means.
Speaking at the end of the Monetary Policy Committee (MPC) meeting on Tuesday in Abuja, Cardoso said the exercise was unfolding smoothly and in line with expectations.
“We are monitoring developments, and indications show the process is moving in the right direction,” he told journalists.
As at April 2025, Nigeria had 44 deposit-taking banks comprising seven commercial banks with international authorisation, 15 with national authorisation, four with regional authorisation, four non-interest banks, six merchant banks, seven financial holding companies and one representative office.
Cardoso said the recapitalization drive would strengthen banks operating within and outside Nigeria. “We are building a financial system that will be fit for purpose for the years ahead. Many Nigerian banks now operate across Africa and have been innovative across different markets. These new buffers will better equip them to manage risks in the multiple jurisdictions where they operate,” he said.
He added that the benefits would be felt broadly across the economy. “Ultimately, this benefits Nigerians—our traders, our businesses and our citizens—who operate across those regions. It should give everyone comfort to know that Nigerian banks with deep local understanding are present to support them. Commercial banks are also creating their own buffers through the ongoing recapitalization.”
Announcing the outcome of the MPC meeting, Cardoso said all 12 members were in attendance and they all voted to retain the monetary policy rate at 27 per cent, adjust the standing facility corridor around the MPR to +50/-450 basis points, maintain the cash reserve requirement for deposit money banks at 45 per cent, keep merchant banks’ CRR at 16 per cent, apply a 75 per cent CRR on non-TSA public sector deposits, and leave the liquidity ratio unchanged at 30 per cent.
He said the decisions were driven by the need “to sustain the progress made so far towards achieving low and stable inflation,” noting that the committee remained committed to a data-driven approach in guiding future decisions.
On the country’s $46.7 billion foreign reserves, the CBN Governor said Nigeria was in a strong position. “On reserve adequacy, we currently have about 10 months of import cover, which is a very good position. In fact, the underlying strength is even greater, as there is significant liquidity within the market that may not be immediately obvious.”
Cardoso attributed the improvement to stronger non-oil exports, better oil production, rising remittances and renewed portfolio investment. “A more competitive currency encourages exports, and we are seeing this especially in non-oil exports. Oil production has also improved compared with where we were previously,” he said.
“International remittances have risen as well. The important thing is that reserves are being built in a systemic and sustainable way. Portfolio investors are returning because reforms have made Nigeria more attractive, and the market is now more open and transparent.”
Cardoso said the broader economy was stabilizing after a period of volatility. “The macro indicators are looking a lot better, and inflation has come down steadily. This time last year it was over 34 percent, and now we are around 16 percent”
He noted that stability was essential for long-term growth. “A year and a half or two years ago, there was a lot of instability in our markets. When markets are unstable, investors who would normally invest stay away. Now we have moved from instability to stability. After stability comes investment, and after investment comes growth.”
He said recent quarterly growth figures already reflected the shift in sentiment. “If you look closely, you will see that growth has returned over the last couple of quarters. With stability now achieved, investor confidence rises, investment follows, and the issues you mentioned become easier to address.”
The governor defended the CBN’s decision to halt direct lending interventions, saying past programmes were unsustainable. “We did a study of past CBN interventions and found that total interventions amounted to about N10.93 trillion over many years. Out of this, N4.69 trillion—about 43 percent—is still outstanding. Since we came in, we have been able to recover about N2 trillion, but the remaining amount is still very large.”
He argued that the large outstanding exposure made further interventions imprudent. “We cannot embark on new interventions without risking further distortions. Excessive interventions in the past contributed to economic instability.”
Cardoso said the new model—where the CBN acts as a catalyst—is already proving more sustainable. “In the past, central-bank interventions discouraged commercial players—who could not compete with subsidised CBN rates—from innovating or developing new products. There was also a moral hazard problem: loans were taken as if they did not need to be repaid.”
He said the new approach would support development finance through market-driven channels. “We are supporting others to make meaningful impact, but in a responsible, sustainable and market-driven way. With proper structure, we believe this approach will ultimately unlock more development finance than past interventions did.”
The CBN Governor described Nigeria’s removal from the Financial Action Task Force (FATF) grey list as a major milestone. “The Central Bank, NFIU, SEC, EFCC, the Ministry of Finance and all the security agencies worked with incredible unity. This was specially acknowledged by the FATF team. The Vice-President himself attended and chaired the session, demonstrating strong national commitment.”
He said the challenge now was staying compliant. “We were not on the grey list three years ago, so certain things happened that pushed us into it. Now that we are off it, everything must be done to ensure we do not slip back.”
He explained that the exit would strengthen cross-border banking relationships. “When you are on the grey list, correspondent banks become cautious; once you exit, they are far more willing to deal with Nigerian banks, and pricing becomes more competitive.”
Addressing concerns about the sustainability of the steadier foreign-exchange market, Cardoso insisted that the gains were driven by genuine market activity. “We now run a system of willing buyers and willing sellers. People buy and sell freely, and the process is open and transparent. Our NFEM system allows everyone to see who is buying and who is selling.”
According to him, average daily turnover has reached $500 million, often without CBN intervention. “In the past, if the CBN did not intervene, nothing happened. That era is gone.”
He said transparency and consistency had restored market confidence. “The spread has narrowed from about 60 percent when we began reforms, to around 2 percent today.”
Cardoso noted that Nigerians were already enjoying the benefits. “Travellers are witnessing the benefits. The fear and uncertainty that once characterized the market have disappeared. Nigerians can travel and pay with their naira cards without the anxiety that once existed. Nigerians are increasingly proud to hold the naira—and that is a very positive development.”
