Business
Weaker Global Growth Expected In 2011, 2012 – Report
After a year of fragile and uneven recovery, global economic growth started to decelerate on a broad front in mid-2010 a world Economic Situation and Prospects report has said.
The report for 2011 was released on Tuesday in Addis Ababa.
The178 page report, presented by Mr Adam Elhiraika, of Economic Department and NEPAD Division of the UN Economic Commission for Africa (UNECA), said the slowdown would continue into 2011 and 2012 as weaknesses in major developed economies continue to drag on the global recovery.
It stated that the slowdown in recovery posed risks for world economic stability in the coming years.
“The unprecedented scale of the policy measures taken by governments during the early stage of the crisis no doubt helped stabilise financial markets and jump-start a recovery’’, it stated.
According to the report, the policy response weakened during 2010 and was expected to be much less supportive in the near term as widening fiscal deficits and rising public debt have undermined support for further fiscal stimuli.
“Many governments, particularly those in developed countries, are already shifting towards fiscal austerity, a trend that will adversely affect global economic growth in 2011 and 2012’’, it stated.
The report said global recovery was dragged down by the developed economies as the World Gross Product (WGP) was forecast to expand by 3.1 per cent in 2011 and 3.5 per cent in 2012.
Among the developed countries, the US has been on the mend from its longest and deepest recession since the Second World War.
“The US has been experiencing the weakest recovery pace in history because the level of GDP would return to its pre-crisis peak by 2011, while full employment recovery would take another four years.
“Growth in many European countries will also remain low, drained by drastic fiscal cuts, some may continue to be in recession, while that of Japan would also decelerate notably,’’ it noted.
The report said developing countries and economies in transition continued to drive the global recovery, but their output growth would be expected to be moderate in 2011 and 2012.
It stated that developing Asia would continue to show the strongest growth performance.
“Strong growth in major developing economies, especially China, is an important factor in the rebound in global trade and commodity prices, which is benefiting growth in Latin America, the Commonwealth of Independent States and parts of Africa.
“Yet, the economic recovery remains below potential in all three regions,’’ it explained.
It stated that formidable challenges remained for the long-run development of many low-income countries because their recovery would also be below potential.
According to the report, between 2007 and the end of 2009, at least 30 million jobs were lost as a result of the global financial crisis.
“Despite a rebound in employment in parts of the world, especially in developing countries, the global economy will still need to create at least another 22 million new jobs in order to return to the pre-crisis level of global employment.
“At the current speed of the recovery, this would take at least five years’’, it stated.
The report said recent economic crisis should provide impetus for structural economic transformation, job creation, food security, poverty reduction and adoption to climate change embedded in comprehensive natural development strategies.
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.
