At the 36th CBN Seminar for Finance Correspondents and Business Editors in Abuja yesterday, the Deputy Governor of Corporate Services of the bank, Emem Usoro, represented by the Acting Director of Corporate Communications, Mrs. Hakama Sidi-Ali, stated that “Building a one trillion-dollar economy is not an easy task.
It would require careful planning, robust and clear policy direction, dutiful implementation, and avowed commitment from stakeholders that would galvanize the various sectors of the economy. Nigeria would need strong, resilient, and stable banks in its quest to achieve the $1 trillion economy target set by President Bola Tinubu against the 2030 timeline.
“As we work towards building a One-Trillion Dollar Economy, we must consider the recapitalization of our banks to be able to fund, finance and power the economy to favourably compete with its peers globally
“We should particularly pay significant attention to banks to ensure that our banks are strong, resilient, and stable enough to carry out financial intermediation and the much-needed financing of development projects and programs.
“The push for a recapitalization of banks would no doubt improve the strength and health of the financial system, deepen financial intermediation, and promote healthier competition that would strengthen our payment system.”
Usoro said that with the Nigerian economy currently valued at approximately $250 billion, achieving a $1 trillion economy by 2030 requires that all hands be on deck. She noted that the global financial system and architecture have assumed a new dimension, especially with the administration of President Donald Trump in the United States of America, which required countries and their financial systems to be prepared and ready to utilize opportunities created by financial globalization through appropriate policy support and actions.
Meanwhile, speaking on his paper, “Banking Recapitalization Towards a One Trillion Dollar Economy,” the Director of Banking Supervision, Dr. Olubukola Akinwumi, said that CBN had moved away from the past approach and continued to move forward to ensure that “banks are properly positioned to address their CRR (Cash Reserve Requirement) obligations.”
He said that the incentives in the recapitalization exercise for banks lay with the fact that a stronger bank would be able to handle more large-scale or big-ticket transactions, such as infrastructure financing.
He added, “As you may know, the government has already begun talking about infrastructure concessions. So, the environment is being primed for banks to benefit from building appropriate capital bases that allow them to do more business.
“The incentive, therefore, lies in the value the economy offers—encouraging banks to continue lending and to earn better returns from their lending activities.”
Dr. Akinwumi said that CBN would continue to engage with the Deposit Money Banks to encourage them to lend more to the real sectors of the economy, especially agriculture, manufacturing, and the small and medium enterprises, which are the engine of growth.
He stated, “Regarding whether agriculture, manufacturing, and infrastructure will be powered—those are critical sectors for us to achieve a trillion-dollar economy. That fact is not lost on the banks. We continue to engage with them to lend to these critical sectors of the economy.
“Those sectors are also being prioritized by the government. If you look at the budget for this year, those sectors—health, education, infrastructure, and agriculture—are prioritized. That, in itself, is a signal to the banks that when the government supports these sectors, they are ripe for business.”
However, speaking at the seminar, Mr. Oliver Alawuba, Managing Director of United Bank for Africa (UBA), who provided industry perspectives of the restructuring exercise, urged the fiscal and monetary authorities to have confidence in Nigerian banks and allow them to manage some of the nation’s external reserves, saying this was imperative in growing the economy to meet the $1 trillion target.
He said, “We need to believe in Nigerians that we can do it. We are managing the reserves of other African countries in some of the countries where we are present. We want Nigerians to trust Nigerian banks. We need to trust some of the nation’s reserves. We can start with maybe 10 percent or 20 percent and so on.”
He hinted that the quest for a trillion-dollar economy appears elusive, given the current growth rate of 3.8 percent compared to the required minimum of 10 percent.
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