Central Bank of Nigeria Advocates Recapitalization to Fuel $1 Trillion Economy Ambition

In a disclosure at the 2023 Nigeria Sustainability Summit held in Lagos, the Central Bank of Nigeria (CBN) has emphasized the necessity of the proposed bank recapitalization as a crucial catalyst for the government’s ambitious goal of attaining a $1 trillion economy and ensuring a sustainable financial sector in Nigeria.

Dr. Olayemi Cardoso, representing the CBN Governor, shared this insight during the summit facilitated by the European Organisation for Sustainable Development (EOSD) and hosted by Access Holdings Plc.

Bala Mustafa, the Director of Financial Policy and Regulation at the CBN, asserted that the recapitalization initiative aims to mitigate potential losses and align with the government’s aspiration of achieving a $1 trillion economy by 2030. Mustafa cited the success of the 2005 bank recapitalization, which raised minimum capital requirements from N2 billion to N25 billion, noting that it proved invaluable during the global financial crisis, safeguarding the Nigerian banking system and averting widespread collapse.

Looking ahead, Mustafa highlighted the current macroeconomic challenges, emphasizing the opportunity to build on past successes by ensuring adequate capitalization of banks. This, he believes, will not only cushion potential losses but also contribute to the realization of the government’s economic ambitions in a manner that prioritizes sustainability for future generations.

The summit also focused on sustainability in the financial sector, with the CBN previously leading the commitment to meet sustainable banking principles in 2012. Omobolanle Victor-Laniyan, Head of Group Sustainability at Access Holdings, underscored the private sector’s crucial role in driving positive change, advocating for sustainable policies, and implementing innovative solutions.

Arshad Rab, Chairman of the International Council of Sustainability Standards for Value-Driven Financial Institutions and CEO of EOSD, declared the formal unveiling and discussion of the world’s most comprehensive sustainability framework under the Sustainability Standards and Certification Initiative (SSCI). He highlighted the summit’s potential to engage major players in the economy, encouraging corporate Nigeria to join in making the country high-income, high-skilled, technologically advanced, socially inclusive, and environmentally friendly. Rab envisioned sustainability-certified financial institutions leading Nigeria towards 21st-century economic progress, characterized by high-speed innovation and progress.

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