CBN: Banking sector strengthened as 32 Banks complete recapitalization

The Central Bank of Nigeria (CBN) has revealed that 32 Nigerian banks have met the revised minimum capital requirements under its ongoing recapitalisation programme, marking a significant milestone in efforts to strengthen the country’s financial system.

Speaking at the Monetary Policy Forum in Abuja on Thursday, CBN Governor Olayemi Cardoso described the progress as “commendable,” noting that it positions the banking sector to better support long-term investment and Nigeria’s ambition to become a $1 trillion economy.

“The banking sector recapitalisation programme has recorded commendable progress, with 32 banks having already met the revised capital requirements. This achievement has significantly strengthened the resilience and capacity of the Nigerian banking system, positioning it to effectively mobilise long‑term capital, support productive investment, and play its critical role in enabling the transition towards a $1.0 trillion economy,” Cardoso said.

He explained that the recapitalisation is part of broader reforms aimed at enhancing governance and risk management across the banking sector.

 Key measures include the introduction of a risk-based capital framework, phased exit from regulatory forbearance, stricter enforcement of insider lending rules, and restrictions on credit access for major non-performing obligors.

The CBN governor also highlighted improvements in supervisory capacity through digital tools, including enhanced early warning systems, improved off-site surveillance, and stronger cross-border supervision of Nigerian banks operating internationally.

Cardoso noted that monetary tightening contributed decisively to reducing inflation, with headline inflation falling from 34.8% in December 2024 to 15.06% in February 2026. The Monetary Policy Committee had raised rates aggressively by 875 basis points in 2024 before gradually easing, cutting the policy rate to 26.5% in February 2026.

On foreign exchange, the CBN cleared over $7 billion in verified FX backlogs and introduced a rule-based willing-buyer willing-seller system to improve transparency. These measures, along with tighter reporting standards and improved market surveillance, helped reduce the parallel market premium to below 2%.

Diaspora remittances have emerged as a stable source of foreign exchange, rising from $200 million to $600 million monthly, with a target of $1 billion per month by the end of 2026. Gross external reserves increased to $50.12 billion in February 2026, up from $38.34 billion a year earlier, while net reserves rose from $3.99 billion in 2023 to $34.80 billion in 2025.

The governor also highlighted reforms to reduce excessive Ways and Means financing, from N26.95 trillion in May 2023 to N2.84 trillion in January 2026, which restored compliance with statutory limits and strengthened central bank independence.

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Nigeria’s reform progress has drawn international attention, with sovereign rating upgrades from Fitch and Moody’s, and the country’s exit from the FATF grey list in October 2025. The IMF also acknowledged improvements in transparency and discipline in its 2025 Article IV consultation.

Cardoso emphasised that the next phase of reforms will focus on consolidating gains, targeting single-digit inflation, sustaining exchange rate stability, and further strengthening reserves. He projected domestic growth at 4.49% in 2026, while noting potential global risks such as geopolitical tensions and oil price volatility.

“The most challenging phase of macroeconomic adjustment is now behind us,” he said, urging continued collaboration across stakeholders to sustain progress.

Financial analysts say the recapitalisation milestone signals renewed confidence in Nigeria’s banking sector. Chinonso Okeke, a banking sector analyst, told reporters, “The fact that 32 banks have already met the revised capital requirements shows that Nigerian banks are not only resilient but increasingly attractive to both domestic and foreign investors. This should translate into higher credit availability for businesses and more robust economic growth.”

Another economist, Adebayo Alabi, noted, “The combination of recapitalisation, tighter monetary policy, and strengthened FX management provides a strong foundation for sustainable growth. If these reforms are consistently implemented, Nigeria could see a structural improvement in both investment inflows and financial stability over the next five years.”

The CBN also reported that Nigerian banks mobilised a total of N4.61 trillion in fresh capital under the recapitalisation programme, highlighting strong investor appetite and increasing foreign participation in the sector. Analysts believe this capital injection will enable banks to expand regionally and deepen financial inclusion across Nigeria.