Business
18 States Worse Hit By Poverty – AfDB
Poverty rate in more than half of the 36 states of the nation is above the national average of 69 per cent, the African Development Bank has said.
The bank said this in its African Economic Outlook 2020 obtained by The Tide, recently.
The bank said that poverty was widespread in the country, adding that the national poverty rate was 69 per cent of the population.
This means that out of the country’s reported 180 million people, 124.2 million people live in poverty.
With more than 50 per cent of the nation’s 36 states having a poverty rate above the national average of 69 per cent, it means that the poverty levels in these states, which the bank did not mention, are even worse.
The report said, “Poverty remains widespread. The poverty rate in over half of Nigeria’s 36 states is above the national average of 69 per cent.
“High poverty reflects rising unemployment, estimated at 23.1 per cent in 2018, up from 14.2 per cent in 2016. Low skills limit opportunities for employment in the formal economy.
“Government social programmes – N-Power and other youth empowerment schemes – are meant to address unemployment.”
According to the bank, Nigeria spent more than 50 per cent of federally-collected revenues on debt servicing in 2019.
On the performance of Nigeria’s economy in 2019, the bank noted that agricultural sector suffered a setback due to flooding and conflicts between herdsmen and farmers.
It, however, reported that the country saw growth in the transport, oil and Information and Communications Technology sectors.
The report said, “Real Gross Domestic Product growth was estimated at 2.3 per cent in 2019, marginally higher than 1.9 per cent in 2018.
“Growth was mainly in transport, an improved oil sector and Information and Communications Technology. Agriculture was hurt by sporadic flooding and by conflicts between herdsmen and local farmers.
“Manufacturing continues to suffer from a lack of financing. Final household consumption was the key driver of growth in 2019, reinforcing its 1.1 per cent contribution to real GDP growth in 2018.
“The effort to lower inflation to the six to nine per cent range faced structural and macroeconomic constraints, including rising food prices and arrears payments, resulting in a rate estimated at 11.3 per cent for 2019.
“With fiscal revenues below seven per cent of the GDP, increased public spending widened the deficit, financed mainly by borrowing.
“At the end of June 2019, total public debt was $83.9bn, 14.6 per cent higher than the year before. That debt represented 20.1 per cent of the GDP, up from 17.5 per cent in 2018.
“Domestic public debt amounted to $56.7bn, external public debt, $27.2bn. The share of bilateral debt in total debt was estimated at 12.1 per cent and that of Eurobonds at 40.8 per cent.
“High debt service payments, estimated at more than half of federally-collected revenues, created fiscal risks. The current account surplus sharply declined due to increased imports, lower oil revenues and a smaller-than-expected improvement in capital flows.”
The report said the Central Bank of Nigeria’s recent ‘decree’ that banks hold loan-deposit ratios of 60 per cent boded well for increasing lending to the real sector.
“Simultaneously, the retrenchment of government borrowing and easing of the risks of lending to small business could lower interest rates and unlock bank lending to the private sector,” the report added.
It backed the increase in Value Added Tax, saying, “An increase in the value-added tax from five per cent to 7.5 per cent to shore up domestic non-oil revenues is welcome, though organised labour and businesses have raised concerns of a potential rise in costs.”
It said the current account was projected to remain in surplus in 2020, benefiting from improved oil revenues.
According to the report, Nigeria has many opportunities to transform its economy, particularly in agro-processing.
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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