Tinubu Tasks Banks To Deploy ₦180trn Balance Sheets To Fund Businesses

…says Stability has returned, credibility is rising, and prosperity is coming President Bola Ahmed Tinubu has challenged Nigeria's Deposit Money Banks (DMBs) to deploy more than ₦180 trillion in combined balance sheets following the industry's recapitalisation exercise to finance businesses, boost investment and accelerate economic growth. Advertisement The President said the recapitalisation of the banking sector must go beyond creating larger balance sheets, stressing that the additional capital should translate into increased capital formation and financing for productive activities in the real economy. Tinubu, who spoke on Tuesday as Special Guest of Honour at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja, said the banking industry had a critical role to play as Nigeria pursues its ambition of becoming a $1 trillion economy. Advertisement The President, represented by the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, said the administration's economic reforms had restored stability and credibility, but warned that stability must now be converted into investment, production, jobs and improved living standards. Speaking on the theme, 'Building a Resilient Economy in an Era of Disruptions: Strategic Imperatives for the Banking and Financial Services Industry,' Tinubu said the country had entered a new phase of its reform journey. Advertisement 'The current phase of our reform journey is accelerating the conversion of stability into investment, investment into production, production into jobs, and growth into improving standards. 'The banking and financial services industry will be central to this transformation. Therefore, we need to move from intermediation to transformation.' Advertisement According to him, the performance of financial institutions should no longer be judged principally by balance-sheet growth, profitability and shareholder returns, but increasingly by their contribution to the real economy. He noted that businesses could not expand sustainably without access to affordable credit, while manufacturing and millions of productive micro, small and medium enterprises (MSMEs) would remain constrained if financing gaps persisted. Advertisement Tinubu said the Federal Government was therefore expanding guarantees, risk-sharing mechanisms, blended finance and credit-enhancement schemes through the National Credit Guarantee Company to de-risk productive investments and attract more private capital. The President said recent economic indicators showed that Nigeria was gradually moving onto a stronger footing, citing improvements in external reserves, inflation, sovereign yields, trade and the country's outlook by rating agencies. Advertisement 'Our capital health here today to date has returned about 60%, and that makes us one of the best performing in the world. Our Q2 trade surplus, which has just been released, grew by over 100% year-on-year,' he said. He added that Nigeria's sovereign spread over US government bonds had narrowed to below 200 basis points, while external reserves had crossed $54 billion. 'Stability has returned, credibility is rising, and prosperity is coming. These improvements matter, but we must not mistake measures for economic stability for economic prosperity. Stability is the foundation; prosperity is the destination,' Tinubu said. The Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, said improved coordination between fiscal and monetary authorities had helped restore confidence and strengthen macroeconomic stability. Cardoso, represented by the CBN Deputy Governor, Economic Policy Directorate, Dr Philip Ikeazor, said the reforms undertaken by the apex bank were implemented in collaboration with other stakeholders. 'The level of collaboration between fiscal and monetary policy is unprecedented,' he said. He said the banking sector recapitalisation had demonstrated the depth and resilience of the Nigerian economy, adding that existing buffers were sufficient to cushion the impact of external shocks, including developments in the Middle East. 'No economy thrives without very high performance of banks. The recapitalisation exercise by the banks demonstrated the depths of our economy. We have seen results from the sacrifices made,' Cardoso said. He assured Nigerians that the CBN would continue working to bring inflation down to single-digit levels, while various initiatives were being implemented to ensure that the benefits of economic reforms were increasingly felt by households and businesses. In his opening remarks, the President and Chairman of the Council of CIBN, Dr Dele Alabi, called for stronger transmission of the country's recent macroeconomic gains to businesses and households. He stressed the need for affordable credit, increased job creation, higher incomes and lower operating costs, particularly as businesses contend with an increasingly volatile global environment. Alabi said geopolitical conflicts, energy and shipping disruptions, technological changes and inflation were reshaping the global economy and creating new risks for Nigeria. He cited the Russia-Ukraine war, tensions involving Israel, Iran and the United States, as well as disruptions around the Strait of Hormuz, as factors capable of affecting oil prices, freight costs, food prices, energy and transportation costs. He also highlighted the growing influence of artificial intelligence and fintech on productivity, payments, credit and customer experience, while warning of emerging risks around cybersecurity, data governance, job displacement and systemic stability. According to him, Nigeria remains particularly exposed to global disruptions because of the effects of commodity prices, exchange rates, capital flows and logistics costs on the domestic economy. Alabi, however, said recent financial-sector reforms, particularly the banking recapitalisation programme, were beginning to strengthen the resilience of the sector. He disclosed that 33 banks had met the revised minimum capital requirements, with ₦4.65 trillion in new capital raised, providing additional buffers against domestic and external shocks. He commended CBN Governor Olayemi Cardoso for what he described as transformational leadership in strengthening the banking industry. The World Bank's Chief Senior Private Sector Specialist, Bertine Kamphuis, acknowledged Nigeria's progress towards macroeconomic stability but said significant gaps remained. Kamphuis said inflation remained elevated, while more and better-paying jobs needed to be created by the private sector. 'There are still gaps. Inflation is sticking at over 16%. More and better jobs have to be delivered by the private sector. The capital ratio is strong, the banking supervision is strong. The SMEs and agriculture are where the jobs are, but credit to these areas isn't sufficient,' she said. She commended the recapitalisation of the 33 banks and the maintenance of strong capital adequacy ratios, while also noting Nigeria's exit from the Financial Action Task Force (FATF) list as a significant regulatory achievement. According to her, banking supervision has also improved considerably, with the sector moving away from regulatory forbearance towards stronger prudential standards. 'Things have improved, but it can be better,' Kamphuis said. The Managing Director/Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), Thompson Oludare Sunday, urged banks and other financial institutions to strengthen risk management, corporate governance, cybersecurity and operational preparedness. Sunday said rapid technological advancement, cyber threats, climate-related risks, geopolitical uncertainties and changing customer expectations were fundamentally reshaping the global financial services industry. He noted that while the disruptions posed significant risks to financial institutions, they also presented opportunities for innovation, economic growth and deeper financial inclusion. The NDIC chief stressed the need for financial institutions to strengthen their resilience and preparedness to ensure that emerging disruptions do not undermine the stability of Nigeria's financial system.