Dr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, has stated that the central bank has asked deposit money banks to expand their capital base in order to support President Bola Tinubu’s $1 trillion economy.
This is because he is aware that there was much work to be done in the way the apex bank conducted its business, and that he would require the cooperation of all stakeholders.
Cardoso made these remarks during the 58th Annual Dinner of the Chartered Institute of Bankers of Nigeria in Lagos on Friday, where he was the special guest of honour.
He said:
“In my recent speech at the 370th Bankers’ Committee meeting, I highlighted the economic agenda of the President. The administration has set an ambitious goal of achieving a GDP of $1tn over the next seven years.
“Attaining this target necessitates sustainable and inclusive economic growth at a significantly higher pace than current levels. It is crucial to evaluate the adequacy of our banking industry to serve the envisioned larger economy.
“It is not just about its current stability. We need to ask ourselves, can Nigerian banks have sufficient capital relative to the finance system needs in servicing a $1tn economy in the near future, in my opinion, the answer is no, unless we take action. As a first test, the central bank will be directing banks to increase their capital.
“Therefore, we must make difficult decisions regarding capital adequacy. As the first step, the CBN will be directing banks to increase their capital.”
He said that it was critical to promote pricing stability in order to protect Nigerians’ livelihoods.
He also blamed the apex bank’s recent unfavourable reputation on corporate governance failure, weakened independence and divergence from the main purpose, inefficient FX rules, and foray into development funding.
“I’m confident and optimistic that by taking appropriate corrective actions and strategic steps, we can restore macroeconomic stability and address fundamental flaws,” he added.
cc: Punch Ng
