The presidency has expressed support for the Central Bank of Nigeria’s planned consolidation in the banking sector, saying it would help grow Nigeria’s economy to a new high.
The support came five days after the CBN governor, Olayemi Cardoso, said the apex bank would ask banks to raise new capital.
The President stated on Tuesday, November 28, 2023, at the 40th Anniversary Celebration of the Guardian Newspapers in Lagos that there would be a strong need to revisit banks’ capital adequacy.
Bayo Onanuga, who represented President Bola Tinubu at the event, said the ambition of the current government is to attain a $1 trillion economy in seven years, stating that the plan is achievable. Still, it takes a robust financial sector to arrive at the goal.
He said: “To arrive at the $ 1 trillion economy, we must address the capital adequacy of our banks that will prepare the fuel for this journey.”
Cardoso had hinted at the 58th annual Bankers’ Dinner on Friday, November 24, 2023, that a stress test carried out on Nigerian banks showed that while they can withstand mild to moderate stress, they cannot service a $1 trillion economy envisioned by Tinubu’s administration in the next seven years.
Cardoso said: “Stress tests conducted on the banking industry also indicate its strength under mild-to-moderate scenarios of sustained economic and financial stress, although there is room for further strengthening and enhancing resilience to shocks. Therefore, much work must be done to fortify the industry for future challenges.
