In line with the President Bola Ahmed Tinubu’s plan to enlarge the country’s economy to $1 trillion, the Central Bank of Nigeria, CBN, has directed all banks to increase their capital base.
In the new regime, commercial banks, merchant banks, non-interest banks, and others are expected to increase their capital base to the maximum of N500 billion and minimum of N10 billion as the case may be.
The move represents one in the series of the Yemi Cardoso-led CBN to catch up with the ambitious plan of President Tinubu to enlarge the country’s economy to $1 trillion from the current figure of less than $400 billion, analysts say.
Nigeria is currently the second biggest economy in Africa with a Gross Domestic Product, GDP, of $395 billion, South Africa comes top of the table in the continent with a GDP of $401 billion, while Egypt ranks third with a GDP of $358 billion, according to checks by the magazine.
President Tinubu after taking office last year said the country has more potential and resources to double the economy within a decade.
Delivering the opening address at the 29th edition of the Nigeria Economic Summit, NES, held in the nation’s capital, Abuja last November, Tinubu said his government planned to enlarge the economy to $1 trillion by 2026, adding that a $3 trillion economy is possible within 10 years.
He said: “Distinguished ladies and Gentlemen, a $1 trillion economy is possible by the year 2026 and a $3 trillion economy is possible within this decade. We can do it.
“We’ve done double-digit inclusive and sustainable competitive growth. This is our agenda and I’d like to charge you- the captains of industry here present, to commit yourselves to and redouble your effort to our vision of a renewed hope.”
The CBN governor had also recently hinted the banks to prepare for recapitalization in other to enlarge and strengthen the nation’s financial system.
The last time the banks recapitalize was in 2005 when Charles Soludo was the CBN governor.
According to a circular signed by the Director, Financial Policy and Regulation Department, Haruna Mustafa, to all commercial, merchant, and non-interest banks the CBN said this must be achieved in 24 months starting from April 1, 2024 to March 31, 2026.
Also, the apex ban stated that the directive is applicable to promoters of new banks in each category.
Hakama Sidi Ali, CBN spokesperson who later spoke on the matter gave the breakdown as its affects all classes of banks.
Ali said the new minimum capital base for commercial banks with national authorisation has been raised to ₦200 billion, while the new requirement for those with regional authorisation is ₦50 billion.
She added that the new minimum capital for merchant banks would be ₦50 billion, while the new requirements for non-interest banks with national and regional authorisations are ₦20 billion and ₦10 billion, accordingly.
