Business
Recession: EU Advises Nigeria To Devalue Naira
A European Union (EU) official, Fillippo Amato, has advised the Federal Government to devalue the Naira as part of measures to tackle the economic recession.
Amato, who is also the counsellor and head of Trade and Economics Section of EU, made this known in an interview with newsmen, in Abuja.
The EU official said that recession could not be addressed with traditional development tools.
He said the recession was a recent development which was due to a number of factors, including the fall in oil prices and resurgence of militancy in the Niger Delta.
“To come out of recession, the country has to take brave decisions, regardless of how unpopular they may be such as fully and effectively devaluing the Naira.
“Devaluing the Naira is a measure, which will finally reassure investors and attract new capitals to the country.
“At the same time, it will further reduce imports, thereby removing artificial forex restrictions, and removing any potential waste of scarce resources such as the fuel subsidy.
“Improving security (in the North-East and Niger-Delta) and ease of doing business are also key factors on which the government must urgently work to re-launch the economy,’’ he said.
Amato said that EU had been at the forefront of aid for trade support activities in Nigeria and ECOWAS.
He said the most important programme the EU was implementing in Nigeria with its partners – GIZ, DFID/Adam Smith International and UNIDO – was the Nigeria competitiveness Support Programme.
“The programme aims at improving the quality of Nigeria products to comply with international standards.
“The programme is providing capacity building to several Ministries, Departments and Agencies such as Ministry of Agriculture, Standards Organisation of Nigeria, Consumer Protection Council, Nigerian Customs Services and NADFAC.
“We support the trade institutions in the formulation and implementation of a sound trade policy (support to the Federal Minister of Industry, Trade and Investment, and Nigerian Customs Service).
“This is to improve the business environment, with pilot projects in Kano and Kaduna to improve the procedures for obtaining land titles, and business licences,’’ he said.
He said Nigeria also needed to take advantage of the devaluation of its currency by diversifying its sources of foreign exchange revenue and this mainly through boosting its non-oil exports.
Amato said that EU would increase its support to the country under the Economic Partnership Agreement (EPA) if ratified.
“EPA aims at boosting industrialisation and sustainable development of West Africa, both through improved (predictable, transparent and long-term) trade relations and through a development cooperation component.
“In addition, on September 14, the EU has launched a European External Investment Plan which will further support private sector investments in the African continent, including Nigeria.
“The plan will support investments in the continent by providing targeted guarantees and ameliorating the investment climate and the overall policy environment in partner countries.
“The plan will be implemented through the new European Fund for Sustainable Development, with EU funds totalling €3.35billion until 2020.
“The EU Funds are expected to mobilise up to €44 billion additional investments,’’ the official said.
He, however, advised Nigeria to take into consideration all the opportunities the EPA would offer to Nigeria and communicate them to all interested stakeholders.
“The role of the government is also to reassure all stakeholders that there is no reason to be worried in the course of implementation of the EPA.
“The government will use all instruments offered by the EPA to ensure it will achieve its objective to promote industrialisation and development of Nigeria and West Africa.
“The EU will do its part to ensure these objectives are achieved,” he said.
According to him, in a globalised world no country or regional community can ignore the destiny of its neighbours.
“The EU, in particular, due to its historic ties and geographic proximity to West Africa, has a strong interest in promoting and supporting West Africa’s development, well-being, prosperity and stability.’’
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.
