CIBN: Nigeria's next reform phase must take gains to households, businesses

The Chartered Institute of Bankers of Nigeria (CIBN) has called for a new phase of economic reforms that will translate Nigeria's recent macroeconomic gains into improved living conditions, stronger businesses and higher household incomes. President and Chairman of Council of the CIBN, Dr Dele Alabi, made the call on Tuesday at the 19th edition of the Institute's Annual Banking and Finance Conference in Abuja, warning that improved economic indicators would mean little unless their benefits were transmitted to businesses and ordinary Nigerians. TheNewsGuru (TNG) reports the conference has as its theme, 'Building a resilient economy in an era of disruptions: Imperatives for the banking and financial services industry.' Alabi said Nigeria had recorded important milestones in recent years, including stronger bank capitalisation, improved economic growth and increased investor confidence, but stressed that the country had not reached its destination. 'However, while significant milestones have been achieved in the country at the macro level, we have not yet reached our final destination. It is imperative for the gains made in terms of macroeconomic fundamentals to be cascaded to the micro level, the households, the individuals, and businesses,' he said. He said the next phase of reforms should focus on moving economic stability 'from national balance sheets to business balance sheets, household budgets, and individual balance sheets'. According to him, the banking industry has a critical role to play in achieving this objective, particularly through increased and targeted lending to productive sectors of the economy. Alabi noted that 33 banks had met the revised minimum capital requirements as of March 2026, with about ₦4.65 trillion in new capital raised, describing the development as an important buffer against domestic and external economic shocks. He disclosed that approximately 72 per cent of the incremental capital was contributed by domestic investors, saying the development demonstrated Nigeria's capacity to strengthen local capital formation. 'That makes it very clear that we still have the capacity to build local capital formation in Nigeria. Banks in Nigeria clearly now have the capacity to contribute more to the economic growth of this country, through targeted lending to the rich sectors of the economy,' he said. The CIBN president said the stronger capital base of banks should now be deployed to support businesses and productive sectors capable of driving sustainable economic growth. He also highlighted recent positive economic indicators, including Nigeria's second-quarter 2026 GDP growth of 4.43 per cent, compared with 3.88 per cent in the first quarter. Alabi further cited the change in Nigeria's sovereign rating outlook by Moody's Ratings from stable to positive, as well as the planned reclassification of the Nigerian equities market to frontier-market status by FTSE Russell, as signals of improving investor confidence. 'We have challenges, the challenges are insurmountable, but we should celebrate our wins,' he said. However, he warned that macroeconomic progress must not remain confined to government statistics and financial-sector balance sheets. To drive the transmission of economic gains, Alabi identified micro, small and medium enterprises (MSMEs) as a critical area requiring greater attention from policymakers and financial institutions. He said Nigeria's estimated 39.6 million MSMEs account for about 97 per cent of businesses, 88 per cent of employment and 46 per cent of GDP, making them indispensable to the country's economic development. 'MSMEs remain central and critical to employment, enterprise, and local value creation,' he said. He, however, noted that many MSMEs continued to face high operating costs, unreliable infrastructure, limited market access, low productivity, weak governance, skills gaps and slow digital adoption. Alabi said the CIBN was, therefore, advocating the establishment of sustainable SME hubs nationwide to tackle some of the structural constraints facing small businesses. According to him, the proposed hubs would be tailored to regional comparative advantages and provide shared infrastructure, business advisory services, capacity building, technological support, market linkages and easier access to finance. He said the initiative would reduce operating costs through economies of scale, improve the bankability of MSMEs, stimulate innovation and enable financial institutions to channel recapitalised funds more effectively to productive sectors. 'In this way, the gains of recent reforms can transform and transcend aggregate indicators to stronger businesses, better jobs, higher incomes, and more resilient communities,' he said. Alabi also stressed the need for the financial sector to build resilience against a rapidly changing global environment, noting that geopolitical conflicts, energy and shipping disruptions, technological changes and financial-market volatility continued to pose risks to economies worldwide. He said the rapid expansion of artificial intelligence and fintech was transforming productivity, payments, credit and customer experience, while simultaneously creating new concerns around cybersecurity, data governance, job displacement, market concentration and systemic stability. He said Nigeria was exposed to these global disruptions through volatile crude oil and gas prices, rising energy and logistics costs, exchange-rate pressures and shifts in capital flows. Against this backdrop, Alabi urged stakeholders at the conference to focus on practical solutions capable of strengthening the resilience of Nigeria's economy and financial system. Quoting Nassim Nicholas Taleb's Antifragile, he said: 'Wind extinguishes a candle and energizes fire.' He added: 'Our task as a country, as an industry, collectively and individually, is to build systems, structures, and institutions that are enduring and sustainable.' Alabi said the CIBN's Impact Vision was designed to strengthen professional standards, build industry capacity, promote forward-looking innovation and deliver measurable impact across the financial services sector. He said the annual conference would provide a platform for stakeholders to translate discussions on bank capitalisation, artificial intelligence, financial inclusion, cybersecurity and systemic risks into concrete action. 'The task now before us is to sustain this momentum amid the disruptions and rapid changes globally,' he said. He urged participants to use the conference to develop practical responses that would enable Nigeria's banking and financial services industry to withstand shocks while supporting inclusive economic growth. Meanwhile, Mr Thompson Sunday, the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), said that the resilience of the financial system exceeded adaptation to shocks. Sunday, represented by Mrs Emily Osuji, the Executive Director, Corporate Services of the NDIC, said that building resilience required strong institutions and shared responsibility. He urged banks to provide resources required to support agriculture and businesses among others. In a keynote speech, Dr Matthew Verghis, the Country Director of the World Bank, commended the country for some of its reforms, adding that they had impacted the inflation rates and built investors confidence. Verghis, represented by Bertine Kamphuis, the World Bank's Lead Private Sector Development Specialist for Nigeria, said that about three to four million young Nigerians enter the country's labour force every year. He said that one in 20 Micro, Small and Medium Enterprises (MSMEs) could access bank credit. He said the availability of capital was not an issue in the country but the allocation of it. Mr Oliver Alawuba, the Chairman, Body of Banks Chief Executive Officers (CEOs), said that a resilient economy is one that is designed to adapt to shocks without transferring them to vulnerable citizens. Alawuba commended the Federal Government, and the CBN for their commitment toward the stability of the economy. He said the banking sector recapitalisation had better strengthened the capacity of banks to support growth in the country economy. The Chairman called for fiscal and monetary synergy to unlock productivity in the industry. Sen. Mikhail Abiru, the Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, called on banks to support real sector and deepen financial sector.