In the next five years, the Central Bank of Nigeria (CBN) says it will pursue a programme of recapitalising the banking industry to rank among the top 500 banks in the world.
CBN Governor Godwin Emefiele stated this on Tuesday in Abuja while unveiling his agenda for his second term in office.
He lamented that the current capital base of commercial banks at N25 billion had weakened substantially.
According to Emefiele: “In the next five years, we intend to pursue a program of recapitalising the banking industry so as to position Nigerian banks among the top 500 in the world.
“Banks will therefore be required to maintain higher level of capital, as well as liquid assets in order to reduce the impact of an economic crisis on the financial system.”
He noted the last time commercial bank recapitalisation took place in Nigeria was in 2004 under Prof. Charles Soludo from N2 billion to N25 billion.
According to him those efforts “resulted in positioning Nigerian banks not only in Africa but also being among the top banks in the world in terms of capitalisation 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.”
He added: “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 capitalisation has weakened quite substantially, and there is a need for us to say that it is time to recapitalize Nigerian banks again.”
On other plans for his second term, Emefiele stated the CBN’s intervention in the power sector will continue.
He however lamented the apex bank was unhappy “with the way the whole power sector arrangement is unfolding, but in the course of time, we will provide our advice as to the best ways to really tame this power issue.”
The CBN, he said, has done some interventions, the N213 billion which was meant to settle some of those obligations and also the N700 billion.
While admitting that there were challenges arising from power issues, Emefiele appealed that Nigerians 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.”
