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CBN Plans to Recapitalize the Banking Sector Soon – Emefiele

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CBN Plans to Recapitalize the Banking Sector Soon – Emefiele
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By Tony Obiechina, Abuja

The Governor of the Central Bank of Nigeria, CBN, Mr Godwin Emefiele, says there are plans to carry out a recapitalization exercise for deposit money banks in the country.

Emefiele who made this known while unveiling the Bank’s five-year policy direction in Abuja on Monday, 24th June, 2019 noted that the banks’ capital base which was last recapitalised in 2004 “has been weakened”.

Bank recapitalization is the act of changing the capital structure of a bank to provide more equity funds to meet the bank’s long-term financing needs to ensure the security of shareholders fund.

In July 2004, the CBN announced the recapitalization of the banking sector from N2 billion to N25 billion with effect from December 31, 2004. This led to the reduction in the number of banks to 24 from 89.

He commended his predecessor, Prof Chukwuma Soludo for raising the capital base from N2 billion to N25 billion in 2004 adding now is the time to recapitalise.

“You will all agree with me that it was governor Soludo in 2004 that did the last recapitalization moving the capitalization from N2 billion to N25 billion. 

“I must commend those efforts because it resulted in positioning Nigerian banks not only in Africa but also being among the top banks in the world in terms of capitalization and also helped to increase and strengthen the banks’ capacity to take on large ticket transactions and those are some of the things we badly need today.

“If you relate it N25 billion in 2004 exchange rate which was about N100/$ N25 billion is almost about $200 million today if you relate N25 billion at 360, you can see that it is substantially lower than $75 million so what we are trying to say is that the capitalization has weakened quite substantially, and there is a need for us to say that is time to recapitalize Nigerian banks
again.

“It is a policy trust, which will be discussed, at the Committee of Governors meeting and of course, the framework for recapitalization of Nigerian banks will be unfolded for the whole world to know.

“We will continue to improve our on-site and off-site supervision of all financial institutions while leveraging on data analytics and our in-house experts across different sectors to improve our ability to identify potential risks to the financial system as well as risks to individual banks.

“In the next five years, we intend to pursue a programme of recapitalising the Nigerian banking industry so as to position Nigerian banks among the top 500 in the world.“

“Banks will, therefore, be required to maintain a high level of capital as well as liquid assets in order to reduce the impact of an economic crisis on the financial system. With a rise in digital payment and cybersecurity threats”, Emefiele stated.

On the power sector, the Governor said, “our intervention in the power sector is continuing, we had done some interventions; the N213 billion which was meant to settle some of those obligations and also the N700 billion. I must confess that we are not too happy with the way the whole power sector arrangement is unfolding, but in the course of time, provide our advice as to the best ways to really tame this power issue. 

“But I want to say that yes, part of the challenges that businesses face is power but what I am saying is that we should try to harness the innate strengths in us not to allow not accessing power to derail us from our own shared objectives that we must work hard, create jobs and improve supply and stabilize prices in Nigeria. 

“Don’t get me wrong, we would continue to intervene in that sector but it should not be an excuse to let down our guards to result in a situation where there will be unemployment and hopelessness in our country”, the Governor stressed. 

On whether the policy would lead to mergers and acquisition, the CIBN boss said there was no need to preempt the CBN or banks but that the system will in itself unfold when the guidelines are released.

It is the view of other economic experts, that the present N25 billion recapitalisation introduced in 2004 “does not have the same value as what obtains in 2019 coupled with the differentials in exchange rate over a 15-year period”.

Going forward, the Apex Bank is expected in next five years to leverage on Emefiele’s achievements which had convinced the Buhari Administration to renew his tenure despite opposition from some quarters.

And in readiness for the tasks ahead, the governor disclosed that he has held consultations with some banks and business leaders in the Private sector.

“We intend to sustain the pace of those consultations as this would act as barometer for measuring the progress being made in the implementation of our policies. Our assessment of the outcome of that deliberation shows that with concerted efforts, the challenges facing the country are easily surmountable”, he posited.

Business News

Budget Office Defends Tax Reform Acts, Seeks Due Process

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By Tony Obiechina, Abuja 

The Budget Office of the Federation has reaffirmed the integrity of Nigeria’s newly enacted Tax Reform Acts, cautioning against what it described as governance by speculation and unverified claims following allegations of post-passage alterations.

In a statement on Wednesday, the Budget Office said it had taken note of concerns raised by the Minority Caucus of the House of Representatives, stressing that the sanctity of the law is central to constitutional democracy and not a mere procedural formality.

According to the Office, any suggestion that a law could be altered after debate, passage, authentication, and presidential assent without due process would strike at the core of the Republic and undermine citizens’ right to be governed by transparent and stable laws.

However, it warned that democratic integrity is also endangered by the careless amplification of unverified claims. “A nation cannot be governed by insinuation or sustained on circulating documents of uncertain origin,” the statement noted, adding that public confidence, once shaken by speculation, is often difficult to restore.

The Budget Office emphasized that both government and citizens share a common interest in truth, clarity, and due process, noting that public finance depends heavily on trust in the legality and clarity of fiscal laws. It welcomed the decision of the National Assembly to investigate the allegations, describing institutional inquiry, not conjecture as the appropriate response to claims of illegality.

On public access to the law, the Office agreed that Nigerians and the business community are entitled to clear and authoritative texts of all laws they are required to obey. It clarified, however, that the authenticity of legislation is determined by certified legislative records and official publication processes, not by informal or viral reproductions.

The statement also underscored the importance of separation of powers, warning that claims suggesting Nigeria is being governed by “fake laws,” if not backed by established facts, risk eroding confidence in democratic institutions.

 At the same time, it stressed that legislative scrutiny should not be dismissed by the executive, noting that oversight is a constitutional duty, not an act of hostility.

From a fiscal perspective, the Budget Office said legal certainty is essential for revenue projections, macroeconomic stability, budget credibility, and investor confidence. While it is not the custodian of legislative records, it maintained that uncertainty around operative tax provisions directly affects economic planning.

To restore confidence, the Office proposed a set of measures, including the publication of verified reference texts in a single public repository, orderly access to Certified True Copies for stakeholders, clear public explanations where discrepancies are alleged, and strict alignment of all implementing regulations with authenticated legal texts.

Addressing calls for suspension of the tax reforms, the Budget Office cautioned against allowing prudence to slide into paralysis. It argued that properly implemented tax reform is necessary to reduce dependence on borrowing and inflationary financing, while easing indirect burdens on vulnerable citizens.

“Where clarification is required, it must be provided; where correction is required, it must be effected; where investigation is required, it must proceed,” the statement said, adding that governance and reform should not be stalled by unresolved conjecture.

The Office concluded by describing taxation as a democratic covenant that binds citizens and the state, insisting that compliance depends on transparency and trust. It called on political actors to protect institutions as much as positions, urging citizens and businesses to rely on verified sources and resist the spread of unauthenticated information.

The statement was signed by Tanimu Yakubu, Director-General of the Budget Office of the Federation, who reaffirmed the agency’s commitment to fiscal transparency, institutional integrity, and reforms that advance national prosperity while safeguarding citizens’ rights.

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Tinubu Congratulates Dangote on World Bank Appointment

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By Jennifer Enuma, Abuja

President Bola Tinubu has congratulated Alhaji Aliko Dangote, the President of Dangote Group, on his appointment to the World Bank’s Private Sector Investment Lab, a body tasked with promoting investment and job creation in emerging economies.

In a statement by Special Adviser on Media and Publicity, Bayo Onanauga, the President described the appointment as apt, given Dangote’s rich private sector experience, strategic investments, and many employment opportunities created through his Dangote Group.

The Dangote Group became one of Africa’s leading conglomerates through innovation and continuous investment.

Dangote Group’s business interests span cement, fertiliser, salt, sugar, oil, and gas. However, the $20 billion Dangote Petroleum Refinery and Petrochemicals remains Africa’s most daring project and most significant single private investment.

“President Tinubu urges Dangote to bring to bear on the World Bank appointment his transformative ideas and initiatives to impact the emerging markets across the world fully” the statement said.

The World Bank announced Dangote’s appointment on Wednesday, as part of a broader expansion of its Private Sector Investment Lab. The lab now enters a new phase aimed at scaling up solutions to attract private capital and create jobs in the developing world.

The CEO of Bayer AG, Bill Anderson, the Chair of Bharti Enterprises, Sunil Bharti Mittal, and the President and CEO of Hyatt Hotels Corporation, Mark Hoplamazian, are on the Private Sector Investment Lab with Dangote.

The World Bank said the expanded membership brings together business leaders with proven track records in generating employment in developing economies, supporting the Bank’s focus on job creation as a central pillar of global development.

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Business Analysis

Nigeria Customs Generates over N1.75trn Revenue in 2025

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By Joel Oladele, Abuja

The Nigeria Customs Service (NSC) has generated an impressive N1,751,502,252,298.05 in revenue during the first quarter of 2025.

The Comptroller-General (CG) of the Service, Bashir Adeniyi, disclosed this yesterday, during a press briefing in Abuja.

According to Adeniyi, the achievement not only surpasses the quarterly target but also marks a substantial increase compared to the same period last year, reflecting the effectiveness of recent reforms and the dedication of customs officers across the nation.

“This first quarter of 2025 has seen our officers working tirelessly at borders and ports across the nation.

I’m proud to report we’ve made real progress on multiple fronts—from increasing revenue collections to intercepting dangerous shipments,” Adeniyi stated.

He attributed this success to the reforms initiated under President Bola Tinubu’s administration and the guidance of the Honourable Minister of Finance and Coordinating Minister of the Economy, Olawale Edun.

The CG noted that the revenue collection for Q1 2025 exceeded the quarterly benchmark of N1,645,000,000,000.00 by N106.5 billion, achieving 106.47% of the target. This performance represents a remarkable 29.96% increase compared to the N1,347,705,251,658.31 collected in Q1 2024.

Adeniyi highlighted the month-by-month growth, noting that January’s collection of N647,880,245,243.67 surpassed its target by 18.12%, while February and March also showed positive trends.

 “I’m pleased to report the Service’s revenue collection for Q1 2025 totaled N1,751,502,252,298.05.

“Against our annual target of N6,580,000,000,000.00, the first quarter’s proportional benchmark stood at N1,645,000,000,000.00. I’m proud to announce we’ve exceeded this target by N106.5 billion, achieving 106.47% of our quarterly projection. This outstanding performance represents a substantial 29.96% increase  compared  to  the  same  period  in  2024,  where  we  collected N1,347,705,251,658.31.

“Our month-by-month analysis reveals even more encouraging details of this growth trajectory,” Adeniyi said.

In addition to revenue collection, Adeniyi said the NCS maintained robust anti-smuggling operations, recording 298 seizures with a total Duty Paid Value (DPV) of ₦7,698,557,347.67.

He stated that rice was the most seized commodity, with 135,474 bags intercepted, followed by petroleum products and narcotics.

“From rice to wildlife, these seizures show our targeted approach,” Adeniyi remarked, noting the NCS’s commitment to combating smuggling and protecting national revenue.

Adeniyi also highlighted key initiatives, including the expansion of the B’Odogwu customs clearance platform and the launch of the Authorized Economic Operators Programme, which aims to streamline processes for compliant businesses. The NCS’s Corporate Social Responsibility Programme, “Customs Cares,” was also launched, focusing on education, health, and environmental sustainability.

Despite these achievements, the CG noted that the NCS faced challenges, including exchange rate volatility and non-compliance issues. Adeniyi acknowledged the need for ongoing adaptation and collaboration with stakeholders to address these challenges effectively.

Looking ahead, the NCS aims to continue its modernization efforts and enhance service delivery, ensuring that it remains a critical institution in Nigeria’s economic and security landscape.

“Results speak louder than plans; faster clearances through B’Odogwu, trusted traders in the AEO program, and measurable food price relief from our exemptions. We’ll keep scaling what works,” he concluded.

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